Why Supplier Diversification Makes Sense: The Benefits of Working with Multiple Suppliers for Packaging Procurement
Edelmann Group
The Edelmann Group: More than 3,000 heads and hearts, creating the ultimate packaging experience.
In packaging, securing reliable and high-quality materials is one of the cornerstones of success. But is relying on a single supplier the best strategy? More and more businesses are embracing a multiple-supplier sourcing approach, and for good reason. This strategy not only mitigates risks but also enhances flexibility, cost-efficiency, and supply chain resilience.
As the industry faces evolving challenges – ranging from supply chain disruptions to rising customer expectations – it’s time to explore the benefits of working with multiple suppliers.
Reducing Risk and Ensuring Reliability
A single supplier may seem convenient, but it puts all your eggs in one basket. What happens when that supplier faces a disruption, such as material shortages or logistical issues? Relying on multiple suppliers significantly reduces these risks.
For example, during the COVID-19 pandemic, companies with diversified supplier bases were better positioned to adapt to disruptions. Businesses can maintain production schedules even if one supplier falls short by sourcing similar packaging materials from various suppliers.
Additionally, geographic diversification plays a crucial role. Partnering with suppliers from different regions mitigates risks related to natural disasters or geopolitical instability.
Gaining Competitive Pricing and Quality
Supplier diversification goes beyond the goal of reducing risks; it also helps optimize value. When you work with multiple suppliers, you have the freedom to compare prices, negotiate better deals, and choose the best quality products for your needs.
Healthy competition among suppliers can lead to innovation and higher service standards. For instance, a supplier may improve delivery times or offer discounts to remain your preferred partner. This competition directly benefits your bottom line.
Moreover, having a range of suppliers allows you to adjust orders based on market demands, ensuring you always get the best deal without compromising quality.
Combating Supply Chain Disruptions
Supply chain disruptions are an unfortunate reality in the interconnected world we are living in. From transportation breakdowns to labor shortages, unexpected events can throw a wrench in operations. However, you can build redundancy into your supply chain, making it more resilient, simply by working with multiple suppliers.
Take the packaging industry’s reliance on specialized materials like corrugated cardboard or biodegradable films. A sudden shortage of these materials from one supplier doesn’t need to halt production if you’ve already established relationships with alternative sources.
Balancing Complexity with Flexibility
While managing multiple suppliers can be more complex, the flexibility it provides often outweighs the challenges. For example, working with a diverse supplier network allows you to scale up production quickly during peak seasons without overburdening a single supplier.
However, effective supplier management is key. Tools like supply chain management software can simplify coordination, streamline deliveries, and prevent issues like overlapping shipments or excess inventory.
Fostering Innovation Through Collaboration
Supplier diversity can also be a catalyst for innovation. Different suppliers often bring unique strengths, such as specialized expertise or advanced technology. Collaborating with a range of partners can lead to creative packaging solutions that set your brand apart.
For example, one supplier might excel in eco-friendly materials, while another offers cutting-edge digital printing capabilities. Leveraging their strengths allows you to innovate and meet diverse customer needs effectively.
When Does a Multi-Supplier Strategy Make Sense?
Adopting a multi-supplier strategy is particularly beneficial for businesses operating in competitive, fast-paced industries like packaging. It’s ideal for companies prioritizing:
Of course, this approach requires careful planning to avoid higher administrative costs or diluted supplier relationships. Balancing these factors ensures you get the most out of your supplier network.
Closing Thoughts
Relying on multiple suppliers in packaging is a safety net AND a strategic advantage in one package. From reducing risks to fostering innovation, a multi-supplier approach equips businesses to thrive in an unpredictable market.
And for instance, at Edelmann, we understand the importance of a resilient and diverse supply chain. Our commitment to excellence ensures that our clients receive top-tier packaging solutions tailored to their needs. So, if you are ready to improve your supply chain strategy, we can work together to build a robust, innovative, and future-ready partnership.