In first world countries, credit ratings are transparent, allowing enterprises access to overdrafts, extended credit limits and payment terms or various forms of finance from financial institutions. In developing countries, this is not necessarily the case.
Managing the purchase order process through raising, delivery receipt and invoice processing is critical to reducing fraud. Fraud is a supply chain related category that should not be ignored, as reported in the Kroll Global Fraud Report 2013, and has affected 70% of all companies surveyed. Procurement fraud is a key contributor in those companies affected.
Supply Chain Solutions No.11 – Are the Suppliers Sample and Development facilities capable of meeting your Product Mix?
There is a substantial number of small to medium manufacturers that are not geared to handling a high product mix in sampling and development. Understand the supplier’s sampling output per month versus your demand.
There will be a sales person assigned to your account; it is important to understand who this person is managing your business on a daily basis. They will become the backbone of the vendor relationship and key to your projects and future success.
Define a low-cost country sourcing plan that delivers cost reduction and meets quality objectives. Business typically gain a 10-35% cost savings through low-cost country sourcing.
Clearly, define the sourcing project scope with clear milestones and objectives. Success driven sourcing activities are projects that need a clear statement of what you and stakeholders want to accomplish.