Spreading Your Supplier Risk as a Brand

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Producing products abroad can be hugely beneficial for brands, but external risks also go with it. In our latest post – Finding the Right Manufacturer, a Checklist – we highlighted the important things to look out for when selecting a supplier. Yet, it is beneficial to have more than one supplier to spread your risk.

Of course, handling different manufacturing partners can also be challenging, especially for smaller brands.  We highlight some of the most important points to think about when partnering with multiple suppliers. 

The most minute quality and color differences can harm your brand's image.

The Challenges of Having Different Manufacturing Partners
Finding a supplier is one thing, but getting your products produced, shipped, and on the shelf on time is another. It can become especially challenging if you need to manage the risk of different suppliers. Products often need to be almost identical within the range of specifications. The most minute quality and color differences can harm your brand’s image.

Therefore, clear guidelines for raw materials used, product features, and production techniques are required. If you decide to move part of your production from one supplier to another, it is also crucial that production’s phase-out is smooth and efficient. 

Lead times, available stock, and forecasts are all essential aspects that need to be considered.  Easy, direct communications with the supplier are essential, given this process’s complex and risky nature.

It is thus advisable that most smaller brands produce different product ranges at multiple suppliers.

The Benefits of Diversification
Producing the same products from many suppliers is often too challenging for smaller brands, given the likelihood of consistent product differences and the increased overhead from sourcing the same materials through different suppliers.

It is thus advisable that most smaller brands produce different product ranges at multiple suppliers. This way, the overhead won’t increase, and it mitigates the risk that accompanies having a single supplier.

Having a single supplier can be risky on many levels, and dividing supplier locations can be desirable for different reasons. For example, political sanctions or trade agreements can significantly impact import duties, and social and environmental shifts can disrupt production or entire supply chains. 

Having different manufacturing partners will make your brand more resistant to these external risks. It is a complex process, but it is certainly feasible with the proper methods and manufacturing partners.

Are you interested in discussing the topic of spreading your supplier risk with us? Perhaps you’re keen on learning more about our manufacturing solutions? Contact us today.

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