Tips for Sourcing Raw Materials for Manufacturing

If you’re in the world of manufacturing, then you know that your success is only as good as three important factors: systems, people, and materials. 

A lot of times, the main energy and focus goes into people and systems. And while these are obviously very important elements, it doesn’t mean anything if you don’t have the right materials for the job.

Unfortunately, sourcing high-quality materials that are right for the intended application (and that don’t break the budget) is a very challenging task. But if you put your mind to it, you can find options that work. 

With all of this in mind, here are several tips for sourcing raw materials for manufacturing:

Know Your Needs. Before you start sourcing raw materials, do the proper legwork and get a clear understanding of your needs. Identify the specific materials required for your manufacturing process. Consider the quality, quantity, and specifications that your products demand – not just what you’ve always done. For example, if you need some sort of flexible plastic or resin, don’t just continue to use the same old material because it’s easy to keep things the same. Look into materials that use different diols for improved strength and flexibility. Little tweaks like this make a big difference.

Research Potential Suppliers. Take the time to research potential suppliers thoroughly. Look for suppliers with a good reputation in the industry. Check their credentials, certifications, and customer reviews. A reliable supplier should have a track record of delivering quality materials on time. Don’t hesitate to ask for references or samples to assess the quality of their products.

Compare Prices and Negotiate. Price is obviously one of the most important factors when sourcing raw materials. As you would with anything, compare prices from multiple suppliers to ensure you’re getting a fair deal. (The general rule of thumb with wholesale suppliers of raw materials is to get at least three to five price quotes.) However, don’t sacrifice quality for a lower price. Finding a balance between cost and quality is the key here. Once you’ve shortlisted potential suppliers, negotiate terms to get volume discounts or long-term contracts with better prices.

Evaluate Supplier Reliability. Assess each supplier’s ability to meet your demand – not just give you good prices. (Good prices are worthless if they can’t get you the materials you need when you need them.) When evaluating, check their production capacity, lead times, and delivery schedules.

Build Strong Relationships. Treat your suppliers as partners rather than just vendors. The more open and transparent your communication is, the more timely help you’ll get when you run into issues. A good relationship can lead to better terms, priority treatment, and even insights into market trends and new materials.

Ensure Compliance and Sustainability. The business world has changed and you can no longer shut the doors and do things your own way. Compliance with regulations and sustainability are critical considerations when entering into discussions with raw materials suppliers. Make sure your suppliers adhere to industry standards and legal requirements to avoid any future headaches that could occur from working with questionable suppliers.

Monitor Market Trends. Stay updated on market trends and developments in the industry. As you know, market conditions can affect the availability and price of materials. By monitoring trends, you can anticipate changes and adjust your sourcing strategy accordingly. (We recommend subscribing to industry publications, joining trade associations, and attending conferences on an annual basis.)

Diversify Your Supplier Base. Relying on a single supplier is the definition of risky business. Diversify your supplier base to mitigate risks associated with supply chain disruptions. When you have multiple people you can call, it gives you more potential solutions while also providing leverage in negotiations.

Plan for Contingencies. Despite your best efforts, supply chain disruptions can still occur. (The year 2020 called and it has something to say!) Plan for contingencies by maintaining safety stock and having backup suppliers at the ready. You should also have a risk management plan on file that outlines steps to take in case of material shortages or delays.

Review and Improve Regularly. Regularly review your sourcing strategy and make improvements as needed. A lot of businesses make the mistake of just sticking with the same suppliers because they don’t want to rock the boat. But you should really evaluate supplier performance on a quarterly or bi-annual basis so that you can address any issues.

Turn Sourcing Into a Strength

Sourcing raw materials isn’t the most exciting topic, but it’s highly important. By taking your time and developing strategic processes for finding suppliers and vetting materials, you can have more success. At the end of the day, it’s necessary for your success.