5 Reasons to Diversify Your Suppliers

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Does your supply chain rely on multiple factors to keep up a steady stream of goods you need for your business? To keep your business flowing smoothly you need to know that everything will arrive at the right location and on schedule. It is important to focus on supplier diversity as you build and manage your supply chain.

5 Key Reasons to Focus on Supplier Diversity

1. Decrease the Impact of Disruption

Disruption at any point in the supply chain can have an impact on your business. By diversifying your supply chain, it is easier to decrease the impact of that disruption. What one supplier cannot provide; another might be able to offer. As a result, you will be better positioned to ensure that you can still meet the needs of your customers.

2. Scale Up as Business Grows

Your business may be at the mercy of its suppliers to ensure its continued growth. You cannot supply your customers with stock that you do not have and cannot bring in. You may find that your current suppliers are only able to send a specific quantity of the items you order on a regular basis. As your business grows, you may find that your suppliers can no longer meet your needs. By diversifying your supplier list, you will often find yourself in a better position to grow your business, since you will be able to bring in more stock.

3. Diversify Your Options

Different suppliers may be able to offer you different options when it comes to the goods or raw materials you can order. This can offer advantages. First, it may put you in a better position to offer a wider selection to your customers. Different suppliers may offer you varied brands, varied materials, or more options for your customers. Second, it may mean that you can provide the options that different customer groups need. Suppose, for example, that Option A, delivered by Supplier 1, is extremely popular at one location, but Option B, delivered by Supplier 2, has greater sales at another. With supplier diversity, you can send those items where they really need to go.

4. Know Pricing Options

In many cases, you may be at the grace of your suppliers when it comes to pricing. They have the power to determine what you will pay, and if you want to bring in those goods or raw materials for your customers, you will have to pay those rates. As you diversify your supply chain you will find that you are in a much better position to negotiate to prices. You may have a better overall understanding of the market and what options are available to you.

When you have multiple suppliers competing with one another to send in the supplies your company needs, you may find that suppliers are more willing to lower your prices. Competition often increases the odds that suppliers will offer options that better fit your needs.

5. Improve Shipping Times

If you use a single supplier for all your needs, you will have to wait for that supplier to send out goods for you. If there are any delays along the way, including weather-related changes or changing seasonal demand that influences how the supplier can provide those essential items, there is little you can do about it. When you diversify your suppliers, you have multiple options for getting those items to you. You may be able to get items from a supplier that will not have to come through an area of difficult weather, or you might discover that, while one supplier is dealing with serious shortages, another is able to get the goods you need.

Are you looking for a more effective supply chain planning solution that will allow you to diversify your suppliers and keep up with your needs? Contact us today to learn more about how we can help.

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