Sourcing for resources, from finished raw materials to finished products is a constantly evolving process. The internet has opened up a vast source of information that is actually more confusing and complex. As such, modern sourcing, especially international sourcing, now requires a keen understanding of the complexities of the internet and how to filter out all the irrelevant products and information. Experienced sourcing professionals sift through the mess, and concentrate on only the good, viable and final products for procurement considerations.
When sourcing from e-commerce sites such as Amazon and Alibaba, you have to add an extra element into the mix, and that is product and supplier confidence. It is not enough to rely on customer reviews, of which most are not made by professionals. There are also too many products that are being presented as brand products, but when you go to the source, you find that the product is not a brand item. Other issues include fake products of inferior quality being offered with false information and photos. As well as fake reviews curated by the supplier. These are some of the key concerns that face many buyers that turn to e-commerce sites.
Another aspect of e-commerce sites is the fact that there are many “middlemen” sites taking their cut. It is always best to source directly from the producer when ordering in large quantities. The exception to this rule are large clearing houses that handle large loads and can give immediate discounted prices which would have to have been negotiated with producers if handled personally. However, finding these clearing houses and relying on their supply aspects is an issue that can only be assessed over time, and time is the supply chain enemy. That is why, when companies seek JIT stock levels, it is always best to source directly from the manufacturer and not via an online e-commerce site.
upKaizen is a leading supply chain engineering company that developed a number of services providing a comprehensive solution for international sourcing via the internet.
The process of sourcing is not so much complex as step wise logical. It is also work-hour intensive, where most companies do not have the manpower to handle in depth focused and comprehensive sourcing. This is where upKaizen helps by outsourcing the time and effort as well as the expertise in providing a comprehensive sourcing system.
The phases of any successful sourcing process include a proper infrastructure for managing data. This includes a structured database with both pre-defined key factors and unique properties per product, per supplier and all the variants thereof. This data is stored in rows of information linked to a specific SKU. The other data includes the supplier information, the supply requirements and a list of substitutes or alternatives to replace a original resource. This is termed the master data file, and once filled, usually remains static, except for the demand amounts and times that can change according to the client’s requirements, which are termed a request and purchase order.
The next step in the process is filling in the information, and this requires skilled sourcing activities to find the resources, build up a data sheet of information, including a rating scale that takes into account all the key aspects that each resource requires. It also includes a supplier rating chart with an audit element.
Note, the various simple resources are put through a basic non-linear performance pricing graph exercise. More complex resources demand a matrix of features to be evaluated. The final rating score is based on the resources conformance to meet basic requirements, the supplier’s reliability and the risk factors involved in transportation based on the supplier’s location.
After upKaizen has successfully sourced at least a dozen suppliers, the lists are then processed, and the final scores are applied to each product and supplier. The top scorers go through to the next stage, the lower scorers are not discarded, but kept in the database for future reference and possible audit.
The next step in the process is negotiating terms with the chosen suppliers. This is where upKaizen negotiates with more than one top scorer, to whittle down the list to one or two main suppliers. In international sourcing, it is always best to have more than one supplier to balance the supply mitigating supply risk as well as enable you to create a constant audit of supply performance.
The final stage of any international sourcing process is the receipt of a sample, which is part of the negotiation process, and based on the sample; the final decisions can be made in regard to price/performance and supply demands. upKaizen provides a comprehensive sourcing solution that starts with selecting the products to arranging delivery to the clients preferred address.
The bottom line is this: accurate and reliable international sourcing is becoming more and more complicated by the overload of information on the internet. For a reliable sourcing process, upKaizen has developed a simple stepwise method that will reduce your overheads, streamline your procurement process and provide you with a bespoke optimized service.