There is no doubt, ‘Relationship marketing’ has become the de rigueur for doing business in today’s highly competitive and crowded market place. And, nowhere is this seen more than in the supply chain.
In the industrial sector, in particular, over the years, we have seen a distinct switch from multiple sourcing to a single and parallel sourcing strategy. A policy that has seen the traditional transactional approach – largely based on short term pricing – replaced with a longer-term blueprint.
The automotive sector, for example, has been a fan of single and parallel sourcing for many years. The Japanese philosophy of creating a long term investment with suppliers and the widespread adoption of Just in time’ (JIT) and has, undoubtedly, created a mutually beneficial outcome for both the buyer and supplier.
This can be seen in the commitment, from both parties, to accept flexible contracts that can be re-negotiated rather than having to start from square one.
So, what, in our opinion, are the benefits of single sourcing?
We believe building a long-term supply chain relationship offers a number of advantages. These include cost savings, improved delivery dates, involvement with product refinement and continual development policy based on an on-going relationship with the client.
This, therefore, should enable buyers to negotiate better purchasing arrangements.
We do understand, however, that one of the biggest concerns for many businesses is an over-dependency on one source. The fear that this could lead to reduced competitiveness, less attractive pricing and a commercial risk should anything happen to the supplier.
However, in the current challenging times, with most Organisations looking at their reducing their costs while still remaining competitive in the market-place, we believe, a single source supply strategy can offer major advantages.
These include benefits such as lower costs – due to less work involved in managing the purchase(s), priority delivery dates, continual product improvement and better pricing – all of which can cancel out the apparent disadvantage of dependency on one supplier.
There is also the convenience of single-source purchasing.
There is no need to submit a purchase request to a number of different suppliers. One purchase order cuts down on paperwork, and there is less contact with potential suppliers – all saving time and money.
Therefore, freeing up more profitable time.
Over the years, we have developed long term relationships with many of our clients. In fact, they help craft our business, especially in areas such as new product development (NPD).
We have an in- house team of engineers and technicians, along with a machine shop full of specialised equipment including manual and CNC machine tools. Resources that negate the need to use external sub-contractors.
This saving of time and money is passed directly on to the client.
We believe that by offering a ‘one-stop-shop’ solution for the electric heating elements, temperature control and pneumatic connectors market has, undoubtedly, enabled us to become experts in the Industry. This has enabled us to keep both lead times and costs down.
Our single-source supplier relationship also enables us to commit resources to client projects. This could be anything from sourcing raw materials to producing ‘off the shelf’ products finished for market.
In summary, we believe that by reducing the complexity of the supply chain process – with its one point of contact, multi-skill disciplines and improved workflow undoubtedly increases the efficiency of the buying process.
And consequently, make a significant contribution to the bottom line.
For more information about how we believe our ‘one-stop-shop’ process can help you, give us a call on (01636) 679415