When businesses set out to find suppliers, they often make common sourcing mistakes that can lead to inefficiency, wasted time, and even potential legal issues. In this article, we’ll take a look at some of the most common global sourcing mistakes businesses make and how to avoid them.
Not doing a due diligence on suppliers
One of the most common mistakes businesses make when sourcing goods is not doing due diligence on their suppliers. This is especially true when it comes to global sourcing, as there are many unknown factors involved.
Not doing due diligence on your suppliers can lead to many problems. For example, you may end up buying faulty products from your suppliers. You may also be paying too much for the goods you are buying, or getting products that are not up to your standards.
It is important to do a thorough research on your potential suppliers before making any commitments. This will help you avoid any potential pitfalls and get the best possible products at the best possible prices.
Not verifying supplier quality
One of the most common mistakes businesses make is not verifying supplier quality in which global sourcing companiescan help you. Not verifying supplier quality can lead to a number of problems, including:
-Inability to trust your suppliers
-Loss of money on faulty products
-Higher costs due to delayed deliveries
It’s important to verify supplier quality before you agree to buy products from them. This can be done through various methods, such as checking their references, conducting an inspection, or contacting other companies that have worked with them in the past. By doing this, you can ensure that you’re getting high-quality products at a fair price.
Not having a standardized procurement process
One of the most common global sourcing mistakes businesses make is not having a standardized procurement process. Without a process in place, it’s difficult to track which suppliers are being used and how they’re performing. This can lead to problems with quality, delivery time, and cost.
A standardized procurement process also makes it easier to find suppliers who have the right expertise and capabilities for the project. It’s important to find suppliers who are responsive and able to meet your deadline, as well as provide high-quality products and services.
It’s also important to continuously evaluate supplier performance and adjust your procurement strategy as needed. By following a standardized procurement process, you’ll be able to minimize the risk of making global sourcing mistakes.
Not following up after receiving goods from suppliers
One common mistake businesses make when sourcing goods is not following up after receiving the goods. If a supplier sends goods that are not up to quality or meet the specifications required, it can be difficult to determine what happened and how to fix the problem.
If a business doesn’t follow up after receiving goods from a supplier, it may not receive any updates on the status of the order. This could cause unnecessary delays in shipping and could result in lost revenue. It’s important for businesses to keep track of their orders from suppliers so that they can correct any problems as soon as possible.
Failing to establish and adhere to supplier performance metrics
One of the most common mistakes businesses make is failing to establish and adhere to supplier performance metrics. Without reliable performance data, it is difficult to make informed decisions about which suppliers to keep and which to let go.
Supplier performance metrics should include not just meeting delivery deadlines but also meeting quality standards. If a supplier consistently falls short of delivering products on time or meeting quality standards, it should be terminated from the business relationship. This way, the business can focus on those suppliers that are performing well and avoid wasting resources on suppliers that are not meeting expectations.
Establishing and adhering to supplier performance metrics with the help of procurement consulting firms is an important step in making informed global sourcing decisions. By monitoring supplier performance data, businesses can avoid making costly mistakes in their global sourcing strategy.