Can your organisation manage relationships with multiple suppliers? Whether you opt for multiple suppliers for backup purposes or as part of your overall sourcing strategy, determine whether your organisation is prepared to manage multiple vendors for the same item. It’s typically not enough to have a supplier simply waiting in the wings in case of disaster, since if there’s no relationship they may not want to come to your rescue. Be prepared to nurture the relationship with all your suppliers so you won’t go begging in times of real need. Organisations also must administratively manage their suppliers, effectively storing information in a manner that enables streamlined and easy sourcing decisions.

Finding the right system

Using an international supplier management system as part of a global trade management (GTM) system enables companies to inherently and intuitively approach the complexities of multiple sourcing at the product level. Companies should look for a solution that allows them to store information about multiple sources and account for all the permutations in a single product record in a single repository. The system should also be able to perform import cost calculations and check regulatory compliance for all relevant country of import/country of export combinations.

Consider whether your existing or future system does the following:

• Landed cost — Products sourced from different suppliers have unique landed costs, since they will be coming from different countries. Freight, insurance, duties and taxes all play a role in determining landed cost. There may also be preferential trade programs, countervailing or anti-dumping duties in place between some of these countries to take into account.
• Compliance — each country has different import regulations. Examples include rules around chemical composition, components, labelling requirements and subtleties in product classification. Agencies other than Customs may be involved, and each government has its own set of import filing forms.
• Logistics — getting your merchandise from source to destination is no small task, especially if regular trade routes are disrupted. Each shipment must be rated and booked, and multiple land and sea carriers will need to be managed and tracked.
• Your supply chain can build or destroy your brand. By evaluating your needs and potential changes that you may need to undergo to accommodate multi-sourcing, your organisation can determine if this strategy is the right solution to keep your supply chain in top shape.