Choosing the right suppliers is a crucial decision that can significantly impact a business’s overall success. A reliable supplier network ensures a steady flow of goods and services while also maintaining quality and meeting customer expectations. One effective way to strengthen that network is through supplier diversification.
Relying heavily on a single supplier exposes businesses to risks like supply chain disruptions, price volatility, and compliance issues. By diversifying, businesses can then ensure consistent access to materials, improve their negotiating power, and increase their flexibility in adapting to market changes.
That said, if you're looking to diversify your supplier base, it's important to approach the process strategically to ensure it delivers real value to your business. To help you get started, here are some tips for building a more resilient and diverse supplier network.
1. Map Your Current Supply Chain
The first step in diversifying your supply chain is to take a moment to review and assess your current setup. This means understanding which suppliers provide what products or services, how critical each one is to your operations, and whether you're overly dependent on any single supplier. By mapping this out, you can spot potential risks like a supplier that could easily disrupt your business if something went wrong. Mapping your supply chain also helps you see where exactly diversification is needed.
2. Identify and Vet New Suppliers
Once you understand your current supply chain risks, it’s time to find new suppliers to balance things out. Look for suppliers in different regions or countries, and make sure they’re reliable. Don’t just go for the cheapest option. Instead, consider factors like production capacity, delivery timelines, and quality control.
For example, if you’re a clothing brand and you currently only source fabric from one region, you might want to look into suppliers from other parts of the world to safeguard against disruptions like natural disasters or regional supply chain issues. Vetting suppliers properly helps ensure they can meet your long-term needs.
3. Strengthen Supplier Relationships through Gradual Engagement
When diversifying your supplier base, it’s important to engage with new suppliers gradually. Start with small orders or non-critical products to test their reliability and performance before increasing your commitment. This approach allows you to build trust over time across multiple suppliers without taking on too much risk.
Additionally, timely payments are essential in strengthening these new relationships, especially when you're managing a growing supplier base. Thankfully, digital solutions like Maya Business Deposit can support this effort. Maya Business Deposit, which is commonly used by startups in the Philippines as their settlement account, also has a batch transfer feature that serves not just as an efficient and secure payroll management system but also as a reliable supplier payment tool, making it easy to pay your suppliers. By paying on time, you foster stronger partnerships and ensure that your supply chain remains smooth-sailing.
4. Balance Local and Global Sources
Relying solely on local or global suppliers can create its own set of risks. Local suppliers can be more responsive and offer quicker turnaround times, but they may come at a higher price or have limited capacity. On the other hand, global suppliers might offer lower costs and unique products, but they can be more susceptible to global economic downturns and geopolitical tensions, as well as related delays in shipping because of such events. By balancing both, you can ensure you're prepared for whatever comes your way.
5. Standardize Specifications Where Possible
Custom parts or highly specialized products can limit your flexibility, often locking you into a single supplier. Thus, when possible, aim to standardize your specifications so that more suppliers can meet your needs.
Imagine that you're a manufacturer of electronic devices that uses a specific type of microchip. If you only source that microchip from one supplier and they experience a delay or shortage, it could halt your production. However, if you standardized your specifications for a more common type of microchip, you would have more options to turn to in case a disruption occurs. This gives you more flexibility and reduces dependency on a single supplier. It also allows you to negotiate better prices, as multiple suppliers can bid for your business.
6. Use Digital Tools and Supplier Management Platforms
Managing multiple suppliers can quickly become overwhelming, so it’s helpful to use digital tools to streamline the process. Supplier management platforms let you track performance, monitor quality, and keep everything organized. You can also use them to find new suppliers or ensure that your current ones are meeting expectations.
For instance, one tool you can use to manage supplier payments is the Maya Business Manager dashboard. This user-friendly dashboard lets you easily track all your business banking transactions in one place. Its detailed automated reports also help you stay on top of your supplier payments, ensuring timely disbursements and avoiding delays.
Let Maya Business Deposit Simplify Supplier Payments
Integrating supplier diversification into your business strategy can minimize risks and enhance resilience. However, to effectively manage your expanding supplier network, it’s essential to have the right tools in place. Sign up for Maya Business to access solutions that will allow you to easily monitor supplier transactions and disburse payments on time.
Setting up a Maya Business account lets you open a Maya Business Deposit account that can be used as a convenient settlement account and as a supplier payment tool. Thanks to our market-leading 2.5% per annum interest rate, your PHP 1 million deposit can earn PHP 25,000 in interest per year. What’s more, you’ll be able to send money to your partners and suppliers for free via InstaPay and PESONet, which means more savings.
Signing up also qualifies you for a no-collateral Maya Flexi Loan offer of up to PHP 2 million in just 3 months, which you can use to settle supplier payments. Just make sure to use Maya as your primary processor for all wallet and card payments. Remember that the more you use our solutions, the better the loan offer will be.
Sign up for Maya Business today to enjoy the benefits of Maya Business solutions, thus ensuring efficient management of some of your supplier transactions.
