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Table of Contents

Significance of Working Capital Management for MSMEs
How SCF is better than other financing options
Why SCF is synonymous to easy financing
How SCF is Transforming MSMEs in B2B Industries
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Need Expert Help Finding the Right Supplier for Your RM Procurement? Don’t Miss Reading this Blog

April 3, 2024
min read

Finding suitable suppliers for raw material procurement that fulfill all relevant buying criteria remains one of the most time-consuming activities in procurement.

Supplier evaluation and selection is one of the key organizational functions needed for successful business growth and development. It is critical, therefore, that the procurement professional implements effective processes for qualifying suppliers and determining the award of business.

But let's face it: sourcing the ideal supplier for your raw material procurement can be like searching for a needle in a haystack. The marketplace is a maze of choices, each promising the moon and stars.One wrong turn can lead to production delays, quality issues, and budget overruns.

To summarize, getting the right supplier is not at all easy!

In fact One of Mckinsey's reports states.

On average, it takes about three months to complete a single supplier search, with a sourcing professional logging more than 40 hours of work—and yet able to consider only a few dozen suppliers from a total population of thousands.

Studies show that most buyers primarily dedicate their time to searching for products or requesting samples. Despite the modern age of easy online access to almost everything, the search for raw materials, especially in industries like food, pharmaceuticals, cosmetics, and feed (often known as life sciences), is predominantly carried out through personal networks. Although personal networks might appear convenient, they have limitations in terms of speed and reach, making them less effective and efficient.

In the market, there are many suppliers to choose from, but for raw material procurement professionals, finding and choosing the right supplier that meets the organization's needs is a time-consuming process.

83% of supplier searches take one to six weeks (or more) to identify the right suppliers.

Here are the reasons:

1. That right suppliers for raw material procurement is hard to find

Finding the right suppliers can be a challenging task for several reasons. Firstly, the market is often saturated with numerous options, making it overwhelming for raw material procurement professionals to identify the ideal supplier for their specific needs.

People often start their search on google, but the truth about google searches can be summarized in this quote by Foundem’s CEO of Foundem, Shivaun Raff :

“People expect Google to deliver them the most relevant search results, but the truth is that Google is exploiting that trust and showing them results from advertisers who pay the highest price instead.”

Additionally, the process of supplier selection for raw material procurement requires a thorough evaluation of various factors, such as quality, reliability, pricing, and compliance with industry regulations. This extensive assessment can be time-consuming and resource-intensive.

Moreover, suppliers vary in terms of their capabilities and the range of products or services they offer. To make an informed decision, procurement professionals must consider these differences and align them with their organization's unique requirements. Furthermore, the supplier landscape is constantly evolving, with new entrants and changes in existing supplier offerings, making it even more challenging to stay up-to-date.

2. Requirements are often complex:

Once you've curated a list of potential suppliers, the next hurdle is to ensure that the offerings from potential suppliers align with your specific requirements. Buyers often have specific and complex requirements while doing raw material procurement. Identifying suppliers who can precisely meet these requirements can be a time-consuming process, especially when dealing with non-standard or highly customized products.

3. Meeting Regulatory Requirements: 

Suppliers frequently operate within diverse regulatory frameworks and uphold a variety of industry standards. It's essential to confirm that the selected supplier aligns with the particular regulations pertinent to the buyer's industry, a task that can prove challenging.

Could it be fixed?

Short Answer yes

They say that choosing the correct suppliers for raw material can have a phenomenal impact on an organization's performance. Companies that ensure their supplier relationships align with the best options available in the market can gain substantial competitive advantages.

Here’s how to do it:

1. Use Technology to choose the right one!

If you are still relying on network or Unfocused information platforms like Google to find the supplier online for raw material procurement , you might end up with vast amounts of data and unqualified search results.

Technology can be your most reliable ally. Utilizing advanced procurement platforms like Bizongo, which are specifically designed to connect businesses with the right suppliers. These platforms offer a streamlined and efficient approach to supplier discovery.

2. Search Smartly

The search for the right supplier shouldn't be a shot in the dark. Smart raw material procurement professionals use a well-defined and efficient search strategy. Start by clearly outlining your requirements. What materials do you need, and what are your quality and quantity specifications? Once you have a clear picture of your needs, leverage modern digital tools and platforms that allow you to search smartly.

With the power of advanced algorithms, platforms like Bizongo allow you to perform smart searches. You can filter suppliers based on various criteria, from industry-specific expertise to geographical proximity. This eliminates the need to sift through countless irrelevant options.

Platforms like Bizongo often feature a roster of verified and certified suppliers. This means you can trust that these suppliers meet specific quality and regulatory standards, saving you the hassle of conducting extensive background checks.

3. After finding the right supplier - Ensure Seamless Communication:

Effective communication with your potential suppliers is vital for establishing a strong partnership and efficient raw material procurement. Make sure you have clear channels of communication in place. This includes not only discussing terms and conditions but also understanding each other's expectations, capabilities, and any potential challenges. Transparent and open dialogue ensures that both parties are on the same page and can work together more effectively. It also builds trust and a sense of collaboration, which are essential for a successful supplier relationship.

Bizongo's comprehensive vendor digitization technology revolutionizes communication with suppliers by digitizing your vendor ecosystem and seamlessly integrating your supply chain with suppliers. This digital platform offers the advantage of online vendor integration, creating a centralized hub for effortless communication and eliminating the inefficiencies of offline methods, such as paperwork. This streamlines the entire procurement process, enhancing efficiency, transparency, and ease of interaction with your suppliers.

While undoubtedly challenging, the journey of finding suitable suppliers for raw material procurement can be substantially enhanced through the adoption of the right approach and leveraging technology. This transformation results in a more efficient, transparent, and ultimately, a more successful raw material procurement process.

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