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6 Ways to Find Reliable Sources of Supply

May 16, 2023
In the current supply chain environment, working with suppliers that can provide reliable sourcing to ensure stable and reliable supply has become table stakes for all procurement departments.

The global semiconductor shortage, ongoing raw material shortages, a lack of labor and other deficiencies have all forced procurement departments to stay vigilant and adapt to changing circumstances in order to support ongoing operations. One way companies can get a leg up on their competition in this market is by working with reliable, authorized suppliers that deliver on their promises.

Distributors understand the situation and are stepping up to the plate to help buyers achieve their goals of getting the right product to the right place at the right time. “It's always been critical for us to ensure that our customers have reliable supply,” said Mo Dogar, VP of MCU business development at Renesas Electronics, “and to also support their development processes in a way that ultimately [improves] their own revenue streams and competitiveness in the marketplace.”

Achieving that goal has been “easier said than done” in recent times, namely due to the ongoing supply chain pressures that organizations across most industry sectors have been grappling with since 2020. Fast-forward to 2023 and electronics distributors like Renesas have witnessed a significant spike in demand. “We’ve really seen a huge spike in demand from our consumer goods, smart appliances, industrial and building automation customers,” said Dogar.

“More than anything we’ve seen in the past, it has really highlighted the importance of having a well-managed supplier customer relationship.”

For companies that are struggling under the weight of continued raw material shortages and ongoing supply chain disruptions, here are six tips to start using today to find suppliers that can meet your sourcing needs:

  1. Focus your efforts on a smaller pool of qualified, reliable suppliers. Don’t spread yourself too thin in this area. Instead, look at your current list of suppliers and decide which of them would make the best possible strategic partners. “Having the right mix of suppliers is important,” Dogar affirmed.
  2. Find suppliers who understand your market. The internet has opened up a whole new world of B2B buying opportunities, but not all of those sellers will fully know, understand and have experience working in your market. Focus on strategic partners that understand the nuances of your industry and you’ll increase your chances of working with a supplier that provides a predictable source of supply, technology support and pricing.
  3. Look for suppliers that offer competitive lead times. Defined as the number of days it takes for a supplier to deliver a product or service after receiving an order, lead times can vary depending on a number of factors—so be sure to ask about them. “Especially in the semiconductor world, it takes a certain amount of time to go from design to validation, and from certification to production,” said Dogar. “As a buyer, you need to make sure the lead times are competitive.”
  4. Ask about certifications. Formal recognition programs that acknowledge and verify a supplier’s ability to meet certain standards or requirements set by a customer or a regulatory body, certifications include the evaluation of a supplier's products, processes, quality systems and/or sustainability practices (among other metrics). Look for companies that hold ISO and quality assurance certifications, and have documented quality processes that can be demonstrated and confirmed.
  5. Seek out financially stable suppliers. This one goes without saying, but it does also bear repeating: Look for suppliers that are financially stable and that are in business for the long haul. One potential indicator of financial stability is a company that’s willing to make investments in the kind of customer-facing technology that helps you do business with it in a seamless, unified manner. You can also conduct a supplier assessment that may involve a review of the company’s financial statements, credit reports, customer references and other relevant information.
  6. Ask about shipping locations. You want to make sure that the right arrangements are already in place in terms of where the goods are produced and where they're being shipped to. Coupled with that, look for companies that have stable, global distribution networks in place.

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