5 Strategies for Sourcing Raw Materials

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Have you faced challenges when sourcing raw materials?  Have you had unexpected delays in getting raw materials? COVID has shown us how even minor problems with the supply chain can escalate into substantial issues that can impact your business. There are some strategies you can use to improve your raw material sourcing and better maintain your supply chain.

1. Source Locally When You Can

Sourcing locally has its advantages. First, it’s easier to determine whether your materials are ethically sourced. It’s often easier to get local materials to you, with fewer delays. You may be able to bring them in faster when your inventory needs change suddenly.

Pay attention to where your providers are getting their materials. If your providers are sourcing their materials from overseas or across the country, you may encounter delays.

2. Build a Diverse List of Sources for Raw Materials

Diversity is a wise approach. Sole sourcing may be less expensive, but it means that you are entirely reliant on that source. If there are shortages and challenges that impact that supplier, you may find it impossible to overcome them for your own sourcing needs. If you have diversity in your sourcing, you can bring in raw materials you need even when challenges impact other areas of your supply chain.

3. Increase Your Available Inventory

If you’ve struggled to provide supplies your customers need, consider ways that you can increase your own available inventory. You may need to invest in additional warehousing options to maintain that higher level of inventory, but it can ultimately prove incredibly beneficial to your entire business.

With the right supply chain planning solution, you can get a better idea of what supplies you need to have on hand and what your customers need. When you have the supplies in your own warehouse, you can better manage your overall inventory.

The inventory in your warehouse also puts you in a better position to weather potential supply chain problems, which means you may be better positioned to keep your customers happy even through a shortage or other problem.

Keep in mind, however, that you must accurately predict your inventory and supply needs for increasing your inventory to do you any good. You must track the inventory you have on hand so that you can use it effectively, rather than allowing it to gather dust in a warehouse or ultimately get damaged. Furthermore, if you have perishable goods, there may be a limit to how many you can keep on hand.

4. Connect with a Distributor

Distributors often can  help find additional resources when you are struggling with your primary supply source. They usually buy and sell on a global level, which means they can keep up with current trends and provide you with the most cost-effective solution to your current supply chain needs.

Often, distributors also have resources well beyond the ones you can access on your own, which means they may be able to find supply pathways or solutions that will help you over a difficult patch.

If you work with a distributor on a regular basis, you may find that they can help build your supply chain and your inventory for potential future shortages.

5. Leverage a Consignment Approach

To manage your inventory effectively, you may want to use a consignment approach: you send your products to a distributor but maintain ownership of them until they are sold. Once they’ve been sold, the distributor will pay you for them. Platforms like Amazon FBA, for example, can take care of many warehousing responsibilities for you, which may allow you to maintain greater overall inventory without substantially expanding your existing warehouse solutions.

A consignment approach can cause some problems if you fail to properly forecast demand for your products. However, by using the right supply chain management solution, you can often effectively predict trends, manage inventory, and ensure that you have the right products on hand.

Navigating supply chain challenges has become increasingly difficult for many businesses in the past two years. Sourcing raw materials, including ensuring that you have a steady supply of the materials you need, can be difficult. With these strategies, however, you may be able to do a better job of sourcing the materials you need, maintaining your supply, and increasing overall satisfaction.

Do you need a supply chain management solution that can help you better track and keep up with your needed supplies ? We can help. Contact us today to learn more about how our solutions can benefit your business.

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