Raw Material Sourcing Plan for Manufacturers: A Brief Guide
Today I’ll guide you in raw material sourcing. The raw material is a thing that every manufacturer find out to produce the product. This guide will include definition, sourcing process and a live example of Raw Material Sourcing that let you help.
Raw materials are the primary products that you need to start manufacturing the goods. Suppliers and manufacturers buy the primary goods to process finished goods.
1. Make categories of raw material to be a source
First, decide what product you need and make a list or category that needs for processing the product. It may include a big list of primary product basically depends on products to be finished.
2. Prepare a sourcing strategy
Formulate a raw material sourcing strategy before begins payment. Set your budget, decide the quality of raw material, quantity needed and the place where you need it.
3. Make supplier’s Portfolio
Make a list of Material Suppliers that are providing the raw material for your products. There are too many websites that can provide you raw materials for your products.
4. Select and negotiate with Supplier
When you have done with preparing Supplier’s profile select according to your needs and start negotiating with them.
Here is a content where you can get Negotiation skills for your deals.
5. Analyze Involved Risks
Analyze the risk involved in your raw material sourcing. These risk could be of related to Payment, availability, material delivery, brokerage (if you are getting from the 3rd party).
6. Find a Source for Sourcing
Above I explained you about the raw material suppliers. But you should know there are many online platforms where you can get best deals for raw material sourcing.
7. Aware the current trends while finding sourcing source
Always be aware the current trends when you are seeking for raw material sourcing. There are too many trends for specific items. It could be related to Tin, cobalt or cement or any other one.
8. Ask the best offer
When you are dealing with raw material supplier always ask for the best offer. Or you can deny his offer. Be cautious as a supplier will not walk away to you. He will give you a counteroffer. The counteroffer similar to previous one but will differ in amount, warranty and other terms and conditions.
9. Now Deal Done!
I’m providing you with a live example in case of manufacturing Shoes.
10. Let’s start with Shoes.
Now, a person who is a manufacturer of Shoes.
Just make categories first.
4. Midsole Heel
5. Vamp or Upper
6. Shoe Lace
Now, as this is strategy making stage.
I’ll go for 50-50 payment option and from the debit card. 50% I’ll pay in advance and rest after delivery. I’m setting up the budget limit which should not exceed.
If the limit is exceeding then there are multiple options you can get. 50-25-25. Means 50% in advance, 25% on delivery and rest 25% after a specific time.
Make the supplier’s portfolio
There are many platforms where you can collect the supplier's portfolio. There are Indiamart, JustDial and many more platforms where you can find suppliers.
Similarly, you can find every material’s supplier’s details.
Now, you have Supplier’s Portfolio. Select suppliers and communicate with them.Conduct negotiations face to face if possible and start the deals.
Tell me how it helps you and where you are going to execute this idea.