Are Legacy Vendors Invested In Your Success?
If Not, You Could Be Vulnerable to Risk.
As the technologies that drive manufacturing continue to advance, processes like rapid prototyping are becoming more mainstream and in demand.
To meet this demand, the vendor pool is increasing—and their platforms are evolving to make quoting projects faster and easier than ever.
This seems ideal for companies eager to bring products to market fast. Afterall, having more options to choose from can help you to secure the competitive edge.
But more isn’t better.
In fact, having too many vendors to choose from can lead to analysis paralysis—or “vendor paralysis,” which can introduce elements of risk to the supply chain, business, project, and even your ability to deliver on personal goals.
Of course, this may prompt you to rely more heavily on legacy vendors. But what if they shut down due to any number of business disruptions? How will they deliver your parts? Do they have measures in place to protect your supply in any market?
Solution: Build a diverse network of trusted vendors invested in your success.
To help mitigate risk throughout the product development process, and to your supply chain, build a diverse network of trusted partners based in the USA. A team that functions as an extension of your business with invested interest in helping you to succeed.
Too many options can result in “vendor paralysis.”
Vendor Paralysis and Legacy Vendors: Elements of Risk
A key solution for mitigating risk is to diversify your vendor network. However, this is difficult to accomplish when you have too many to choose from or rely too heavily on legacy vendors.
Forbes defines analysis paralysis as the moments when someone is so overwhelmed with choices that they are unable to make a decision. Vendor paralysis can be defined in the same vein. That is, as the vendor pool continues to increase, the more difficult it becomes to choose one.
For example, indecisiveness will prevent projects from moving forward in the product development process. Which, as you can imagine, will lead to product launch delays, added costs, and missed market opportunity. Further, vendor paralysis can also result in an overreliance on legacy vendors.
3-quote Solution: Getting Quotes vs. Vetting Partners
So how can organizations solve for this indecisiveness? Based on conversations with engineers, purchasing, and sourcing, companies are requiring employees to get 3 competitive quotes for every job.
But getting 3 quotes is different than vetting 3 partners invested in your success.
Though implemented with good intentions, it is a transactional solution. One that does not require vetting a vendor’s capabilities, having conversations around them, ensuring they are accurate and meet the needs of the project.
Ultimately, instead of advancing toward a more diverse network of trusted partners, the 3-quote solution still results in relying too heavily on a select few vendors which can greatly increase risk.
We appreciate the value of legacy relationships. They are safe, comfortable, and reliable. And when faced with aggressive deadlines to bring products to market, it can feel faster and easier to rely on what you know.
There’s no denying that the COVID-19 pandemic revealed painful weaknesses in our supply chains. And, after 2020, it’s a lot harder to say, “that could never happen.”
Unexpected Problems & What They Mean To Your Supply Chain
Now, more than ever, it’s clear that any type of disruption can introduce elements of risk to your business: tariffs, pandemics, hurricanes, tornadoes, earthquakes, wildfires, military uprisings, a death in the family, personal emergency, and human error.
The question, then, is how will your legacy vendors keep your business flowing if their business shuts down due events out of their control? Without a backup plan, how will you get your parts?
Now consider the bigger picture. If your legacy vendors cannot sustain your supply, it could result in missing the chance to bring products to market and failure to secure the competitive edge.
You could also lose your biggest customer who pays your bills, forcing you to lay off employees or close business altogether.
Diversify Your Network of Trusted Partners To Help Mitigate Risk
A diverse network of fully vetted partners can help to mitigate risk to the supply chain, keep a small business from closing, and reduce personal risk.
Further, a network of partners—truly invested in your success – can save time and money, provide higher acceptance rate on parts, provide better transparency on timelines and updates, and enable you to re-establish relationships with previous customers due to better capabilities.
To achieve success, choose US-based suppliers, don’t rely on “what’s always been done” as a litmus test. Further, insist on communication and collaboration between your internal teams and vendors.
Choose 4 USA-based Vendors Per Manufacturing Process
Vetting domestic vendors for manufacturing processes such as injection molding and 3D printing will provide advantages such as shorter logistics and real-time visibility into their manufacturing process.
Building a network that includes 4 vendors for each manufacturing process will help mitigate risk by ensuring you have a backup if there is an unexpected event.
Further, diversifying your network to include partners with different production capabilities can help add flexibility.
Use a New Litmus Test To Vet Vendors
When vetting new vendors, resist the urge to rely on past experiences as a measure of success. One of the critical goals of this process is to diversify your network beyond your current relationships to help mitigate risk and stimulate innovation. Otherwise you will continue on the same path.
Communication & Collaboration Between Internal Teams and Vendors
Break Down Silos To Help Reduce Mistakes
Too often, hard work by many is derailed or overlooked because of one missing piece resulting in a variety of mistakes. Promoting communication and collaboration between vendors and your internal teams can increase transparency and reduce errors.
For instance, typically internal groups (engineers, product designers, purchasing, etc.) are siloed and miss critical communications. Thereby resulting in errors such as quantity requirements, turnaround time, and invoicing.
These mistakes can prevent you from getting the parts you need when you need them. And when teams work together, simple mistakes that could otherwise lead to larger ramifications can be eliminated.
Invest time in the Partnerships
Develop genuine relationships with vendors and stay plugged in with your partner representatives.
This helps to ensure you always know if something may prevent getting accurate parts on time.
Having up-to-date information at all times from your partners will help to proactively mitigate risk and adjust internal planning versus scrambling to fix a problem.
Vendor paralysis and relying too heavily on legacy vendor relationships can make you and your business vulnerable to risk.
Building a diverse network of trusted, domestic partners that are vetted for each manufacturing specialty can help to mitigate risk to the supply chain and maintain the flow of business in any market climate.
If you would like to discuss strategies for diversifying your vendor network, please contact Xcentric. We would love to be part of your success story. Contact our Application Engineers at email@example.com or 586-598-4636.
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