When you hear the words “New Year’s resolution,” goals like going to the gym, eating healthier, and getting your house organized might spring to mind.
Resolutions don’t have to be limited to personal goals, however.
As we begin a new year, we have the opportunity to think about business goals and consider what direction we might want to take to improve things like product quality and supplier relationships.
What kinds of resolutions might you want to consider in these areas?
We have two suggestions.
#1 Assess Your Manufacturing Partners and Have Backups
Right now, at the start of 2020, we recommend thinking about your manufacturing partners and making an honest assessment of them.
This means thinking about tariffs and whether you should be considering options in alternative countries.
It also means considering backup suppliers or re-evaluating the backup suppliers you already have in place.
Why are backup suppliers important?
Over time, capacity needs can grow.
If your ordering takes off and your current factory can’t keep up, you’ll need a second factory to help you meet production demands.
It’s also generally best not to keep all your eggs in one basket.
Remember that if you have a single source supplier and they go out of business or start giving you quality problems or delivery issues, it’s already too late at that point to find a second source.
With backups in place, you can more easily transfer production over to them without any major hiccups in your ordering schedule.
The process of finding a new factory and then bringing them on board is the same as it is for a primary supplier–you should evaluate their capabilities and capacity.
Consider factory audits to help you do this.
Also, consider their lead times and whether they are already selling to your countries of importation.
It makes sense to maintain a supplier matrix that includes suppliers that you may not yet place orders with and re-evaluate it every year.
Keep in mind that there is really no reason to have a backup supplier that is at 100% capacity. For example, in Vietnam, there are many factories at capacity right now.
#2 Assess All of Your Current Service Providers
Aside from manufacturing partners, you undoubtedly have other partners that you work with, such as inspection services providers, testing labs, freight forwarders, sourcing agents, and warehousing and fulfillment companies.
Do you have Key Performance Indicators (KPIs) in place that you use to evaluate them?
Some KPIs to consider for these partners might be things like:
- Communication speed
- Scheduling speed
- Turnaround time
Take some time to set the appropriate KPIs for your situation and set benchmarks in these areas.
You can use them to determine how well your partner relationships are functioning.
In business, like in our personal lives, it is best to always be thinking ahead and striving for improvement.
Doing so will help you operate more efficiently and effectively, and that is always a good thing.
There you have it!
Consider these ideas as you start the new year.
To all our friends and customers… Happy New Year and best wishes from all of us at Insight Quality Services.