The Why, When, and How of Changing Raw Material Suppliers

Deciding to change raw material suppliers can be a complex and daunting process for any manufacturing business. There are multiple factors to consider - from the quality and consistency of the materials, to the reliability and responsiveness of the supplier, to the financial implications of making a switch. However, there are times when changing suppliers is a necessary and strategic move, whether it is to improve product quality, reduce costs, or adapt to shifting market demands.

When considering making such a move it is important to consider the reasons driving the need for change and to take time to develop a thoughtful, methodical approach to vetting and onboarding a new supply partner.

“Switching suppliers is no easy task,” says Fabien Gaussorgues a manufacturer based in Dongguan, China with years of experience in working with suppliers to source raw materials. “[However] proactive management during these transitions can result in improved product quality, shorter lead times, and significant cost savings.”

Why to Change Raw Material Suppliers?

The ‘why’ behind changing suppliers is caused by dissatisfaction with the current provider. This is likely based on raw materials being supplied which no longer meet required specifications, lead times which have become unpredictable, or pricing that has crept up to the point of eroding profit margins.

It may happen that a manufacturing business is evolving and expanding, requiring materials or capabilities that an existing supplier simply cannot accommodate. Alternatively, an innovative new supplier may have been identified that offers technologies, processes, or cost structures that could provide a significant competitive advantage.

Whatever the catalyst, it is critical to clearly define goals and priorities (price? quality? lead times? reliability?) upfront so that a clear and objective evaluation of potential new raw material suppliers can be made.

When to Change Raw Material Suppliers?

The question of ‘when’ to change raw material suppliers is a delicate one, as the timing can have major operational and financial implications. It is therefore necessary to assess current inventory levels, production schedules, and customer commitments to determine the best time to make a switch.

When considering this issue, it is important to give clear warning to all those involved, as others in the supply chain (such as external logistics) will also be impacted. Most notable of these is giving your new raw material supplier plenty of time to adjust to expectations.

“Dropping a large order onto the new supplier and expecting them to just start immediately is unrealistic,” says Gaussorgues. “There are a series of steps to follow to ensure that quality and performance are achieved [as] transferring [can] actually takes around 2-6 months.”

How to Change Raw Material Suppliers?

Guaranteeing a smooth transition to a new raw material supplier means proper planning, it is therefore vital to maintain clear communication with both the old and new supplier throughout the process.

Another way to ease disruption is to initiate a gradual, phased transition. This could involve testing small batches from a new supplier, before slowly ramping up volumes as quality and performance is assured. This approach also enables older, existing stock from the previous supplier to be carefully managed and run down.

Gaussorgues also recommends, “ensuring proper documentation and testing before transitioning to mass production with the new supplier.” Including requesting, “a video tour or on-site visit to assess the new supplier’s capabilities and quality control processes.” As well as considering, “keeping extra stock to insulate you from disruption during the transfer.”

Changing raw material suppliers is a significant decision that requires careful consideration.

The ‘why’ may involve factors like cost savings, improved quality, or supply chain reliability. The ‘when’ is crucial, as the timing must align with production schedules and market demands. The ‘how’ entails a thorough vetting process, establishing clear communication, and ensuring a seamless transition to minimize disruptions.

But ultimately, a thoughtful, strategic approach to changing raw material suppliers can unlock substantial benefits, from enhanced profitability to strengthened competitive advantages. The result is that through considered analysis of the process and plenty of clear communication, manufacturers can be confident in navigating the change and positioning themselves for long-term success.

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