Are you struggling with disruptions to your supply chain?
Four-week lead times have stretched to six, seven, even eight weeks. And scarcity has become an ever-present reality. As such, plenty of manufacturers are accepting that this is simply “the new normal.”
Not MES. We refuse to be held captive by supply chain slowdowns and, instead, are doing what we do best, which is this: We figure it out.
MES was founded on the principle of creating win-win solutions for our customers. For us, this has meant developing our own industry-leading strategies for supply chain, manufacturing, and inventory. It’s also meant continuing to refine and evolve our strategies. Which is why we’ve never stopped developing new systems and processes, which includes our Just-in-Case Inventory Management process and our MESH subscription-based global supplier solution.
Take Control of Your Supply Chain
So, rather than bow down to the global supply chain crisis and accept it as-is, we challenge you to do something about it. We urge you to change the way you approach this crisis by adopting a new, more empowering strategy so you take back control of your supply chain.
What is this new strategy? Dual sourcing, of course!
You already know that dual sourcing (sometimes called multi-sourcing) involves using two or more suppliers for the same product. But did you know that dual sourcing is enabling automotive, EV, lighting, and construction manufacturers supply chain to become more consistent, more cost-effective, lower risk contingency plan for a volatile supply chain?
As we mentioned in this blog post, dual sourcing is not a panacea nor one-size-fits all solution. Depending on volume, dual sourcing may not be cost-effective. Depending on commodity, dual sourcing may not be efficient. And depending on risk, dual sourcing be less advantageous over making or moving a tool.
Avoiding Supply Chain Slowdowns
Like Goldilocks of fairytale fame, there are “just right” circumstances when dual sourcing makes the most sense, both economically and from an efficiency standpoint.
“In the hopes of avoiding the hassle of a too-slow supply chain and the political issues found in China and other parts of the world, we’re seeing everyone and their grandma running to Mexico for their manufactured parts,” says Bhavin Shah, Associate Director of Sourcing for MES. “Unfortunately, capacity in Mexico is shrinking and costs are increasing—the exact opposite of what these people are after. But for those who, like us, have employed a dual sourcing strategy for over 10 years now, we’re having very little trouble circumventing slowdowns, shortages, limited capacity, and high costs.”
If you’re wondering how we’re doing this, keep reading to learn our top three tips for making the most of dual sourcing.
3 Tips to a Winning Dual Sourcing Strategy
Tip 1: Think different.
Like the late 1990s Apple computer campaign slogan, this tip is intended to inspire you to look forward at what could be, rather than backward at what was. Supply chain used to be one way but now it’s not. Rather than trying to make supply chain fit your paradigm, make your paradigm fit supply chain. For you this could mean expanding your supplier base to all parts of the world. Yes, Mexico sourcing can be a great option. But don’t count out China, India, and Vietnam just yet. Let go of the antiquated idea that dual sourcing is “either/or” with “either” being North America and “or” being overseas. Instead, embrace a “both/and” blended scenario that lets you leverage the proximity of suppliers in Mexico with the cost savings of suppliers in China and elsewhere.
Tip 2: Ensure that quality systems are aligned.
For dual sourcing to be successful, you must ensure that you get the same results from both suppliers. That means vetting parts the same way, standardizing packaging to prevent downstream issues, and engaging both suppliers equally with your systems, processes, and business model. At MES, we rely on our boots-on-the-ground, in-country quality teams along with robust onboarding to mitigate supplier-related risks and ensure that our suppliers meet three key metrics: (1) quality; (2) on-time delivery or OTD; and (3) inventory turns/days supply of inventory (DSI). Remember, with dual sourcing while you may have two suppliers, the goal is to manufacture just one high-quality product.
Tip 3: Cultivate and nurture strong supplier relationships.
It’s one thing to source a supplier and another to build a strong and lasting relationship with one. Since the day we opened our doors, MES has been committed to getting to know our suppliers and building rapport with them. We’ve found that investing in our suppliers as partners rather than mere vendors makes a real difference when it comes to trust and reliability. It’s why we strive to be transparent with our suppliers, to have open dialogue about issues and opportunities, and to engage them on both a personal and professional level. Treat suppliers the way you want to be treated and we think you’ll find, as have we, that the higher your relationship currency, the better the outcome. As such, we enjoy better quality, more responsiveness, and improved productivity in an atmosphere marked by continuous improvement and mutual respect.
Implementing a Dual Sourcing Strategy
We hope these tips help you better understand the dual sourcing strategy. When it comes down to it, though, it’s not the tips or the strategy itself that matters most. It’s how you implement dual sourcing that can make the difference in having uninterrupted access to high-quality manufactured parts or wringing your hands and crossing your fingers in hopes that the right part will be available to meet customer demand.
Reach out to us to learn how dual sourcing can help you speed up your supply chain.