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Supply chain management: the impact of poor suppliers and what to do about them


Your business should work like a well-oiled machine, which means all the components must be working in unison. Unfortunately, if you’re experiencing problems with the quality of your end product, issues on your production line, consistently high levels of excessive expenditure and resource waste then it might be time to take a closer look at your supply chain management.

When a bad supplier goes unchecked, it can undermine the entire foundation of your business. Making it difficult for you to get your orders out on time, meet the expectations of your clients and move forward as a successful enterprise.

Where do the problems in supply chain management come from?

According to a Federal Association of Material, Purchasing and Logistics survey, around two thirds ( 67% ) of companies assume risks that could jeopardize supply chain management, followed by 50%, the risk of insolvency and 18% the cyber security risks.

More than half of those surveyed fear serious damage to the company through an impact to the company’s image, loss of sales or fines because ecological and social standards are not adhered to at the supplier levels. The pandemic risk was also listed for the first time and is in fifth place. In contrast to the previous year, companies expect fewer risks in raw material procurement – a decrease of 60% .

If the companies are not the problem…

… it must be the sub-suppliers. At least around 45% of those surveyed report that they cause malfunctions and failures. Very few companies know that a supply chain does not consist of just one level, but of several. Only 24% have these deeper levels in mind. Conversely, this means that around three quarters of all companies do not know which risks in supply chain management they are most susceptible to.

8% of the companies cannot even identify the malfunctions and only 6% know how high the financial damage is. And supply chain interruptions can cost a lot of money: there is talk of 250,000 euros to over 1 million euros.

Around 67% of supply chain specialists consider sophisticated risk management to be desirable. Ehlert too. But many companies do not have the necessary capacities and budgets. This includes the use of modern technology and digitally supported analytics. It is precisely this that is of decisive advantage for the flow of information and continuous risk monitoring. Only 8% of the companies surveyed monitor their risks automatically, 58% use Excel spreadsheets manually.

Supply chain management: the impact of poor suppliers

Understanding the impact that poor suppliers can have on your business – and what you can do about them – is key. In this article, we’ll explore some issues and solutions, read on to find out more.

Wasting Money

Whether you’re sourcing Molex LLC products, passive network components, transformers or something else, without careful planning and access to the right suppliers, the procurement process can quickly exceed your budget. When you’re limited by a specific set of national or local suppliers who have the parts and components you need, it can be difficult to stay within budget. However, switching to an online, global marketplace to source your equipment and parts is the perfect solution.

When you have access to over 550 million parts from over 3,000 fully accredited vendors across the globe, you’ll be able to quickly source the parts you need, at the best price for your business. And using real-time data, you’ll be given the latest prices and deals for what you’re looking for.

Excessive Inventory

When your suppliers are unreliable, then it can play havoc with your inventory management. Too much product is expensive to store and the quality of these components could deplete over time. Too little inventory and your clients could be waiting weeks for their orders, something which can damage your reputation as a reliable and professional OEM.

Utilising an online, global marketplace can help you manage your inventory levels effectively. Processing your BOM means you can order what you need accurately and have these items delivered on time, every time. Using inventory management tools can also help you manage your supplies and keep costs from running out of control.

Faulty Products

Are your suppliers providing you with components that are below par? Whether it’s faulty components or poor design quality, when you’re seemingly stuck with the same supplier, it can feel as though you have no choice but to settle for what you can get. Regrettably, poor suppliers and poor-quality components can mean wasting resources, labour and cost you a fortune in repairs and rectifying client complaints.

Choosing suppliers who have been fully vetted, and selecting components that have gone through stringent quality checks that are fully traceable will ensure that you and your production teams are working with high-quality materials and components.   

Final Thoughts…

There should be no loyalty to suppliers who aren’t providing you with what you need to push your success forward. Apply these suggestions to your business today and move ahead with your enterprise.


About Business Woman Media

Our women don’t want to settle for anything but the best. They understand that success is a journey involving personal growth, savvy optimism and the tenacity to be the best. We believe in pragmatism, having fun, hard-work and sharing inspiration. LinkedIn

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