Sourcing Risks in Short-term Supplier Selection and Decision

For the international trade importers, the top of sourcing risks all along is quality problems, and the second is delayed delivery. Of course, importers will also encounter other sourcing risks, such as the risk of decreasing market demand, the risk of transportation, and the risk of government policies, etc.

However, if let’s turn to focus on the supplier’s product quality and delivery performance on current medical products, all buyers and sellers are in a state of emergency shipment, buyers rushing to choose suppliers, emergency production after placing an order, scheduling shipment, and supplier complete a round of production cycle within a week;

Market turbulence from the Spring Festival to the Present

Since the Chinese Lunar New Year, the COVID-19 epidemic has caused a high impact on the international trade market. There is a shortage of workers, delays in the resumption of factories, a reduction in overseas orders, and a continuous increase in various expenditures.

To avoid higher losses for the company, under such circumstances, the number of suppliers entering the production of medical supplies has suddenly increased to be uncountable. The entire industrial chain of masks has come crazy To the point, even legal mask manufacturers in China call their production lines “money printers.”

Sourcing risks in Seller’s Market

How-to-verify-your-supplier-background-and-company-information Many companies have jumped into the trend of producing PPE (masks, isolation suits, infrared thermometers, etc.).

Traditionally, many buyer teams (including quality, engineering …) will fly to China and Vietnam to visit the facilities of their suppliers, evaluate new suppliers, develop new products, etc. However, this model is completely not applicable at the moment.

In the current COVID-19 outbreak storm, the entire medical supplies market has become a crazy seller’s market. A round of production cycle may be completed within one week or even three days. As a global manufacturing base, China factories guarantees the supply of medical supplies worldwide, but there are also many Chinese “suppliers” who do not have their own production lines. They may be resellers who have never seen their supplier’s factory.

Besides, these small-scale factories may use fake or low-quality raw materials to produce masks in pursuit of maximizing profits. Imagine if you receive “fake” masks from these suppliers, and others rely on these masks to protect their life.

So if you really have to buy a mask in this dangerous window of the market, then you really need to consider the following issues and try not to miss each item. Although you will need to spend part of your budget in the early stage, you will find later every penny donated will be very worthwhile, which will make you not blind in this market;

a. Due diligence on suppliers

You can easily find a large number of suppliers. It is recommended that you prepare a list that lists your requirements for these suppliers and conduct an initial screening of these suppliers; of course, you can also discuss with third-party quality control companies. This list can make the requirements of suppliers more clear;

b. Audit factory

After determining the number of suppliers, conduct an audit of the suppliers and send out auditors to understand what the suppliers are quoting to you in front of the computer. Their companies, warehouses, production capacity, receipts, shipments, etc. Similarly, you can prepare your list and ask a third-party quality control company to help you investigate clearly;

c. Quality Inspection before Shipment

Short-term attention has caused some suppliers to ignore the quality control of raw materials, and also reduced the requirements for process quality control, so buyers must check the product quality before shipment,

This is a critical step because you are likely to need to pay the full payment before shipment. You can know nothing about your goods before the goods leave the factory.

Efficiency overwhelms efficiency. Today’s needs always overwhelm tomorrow’s needs.

Are you tired of the madness of the moment?

The problem is not only related to manufacturers, because the increase in the number of infected people every day is driving the demand in this market, and the timeliness of products can even save some people’s lives。

Therefore, when some buyers receive a notification from the supplier about the stock in the early morning, he can immediately pay the full amount of payment to the supplier, hoping that the supplier can consider giving priority to other buyers and shipping (all by air);

As far as we know, some suppliers or buyers are working 24 hours a day, 7 days a week. The reason for this is that they do not want to miss the window for quick decision-making due to time differences.

Here are some tips to avoid sourcing risks under the breaking storm:

Try to learn as more as possible about the production process, raw materials, accessories and factory capacity of masks or products you ordered;
Different factory equipment means different production capacity, and the quality of the products will be various too.
Try to understand your suppliers in as much detail as possible and ask them to provide relevant information. From their answers and information, you can filter out some suppliers that you think are more professional.
Whether your supplier is a real factory or a middleman, even you are satisfied with them, the supplier must cooperate with the auditors and inspectors to perform factory inspections and inspections to ensure that you are not ordering products from a small logistics warehouse， and avoid your suppliers may not know where the product is actually manufactured.
Seek cooperation from third-party quality control companies like AQI Service. If you are new in buying the PPE products, and your Chinese friend has no work experience in this industry, we suggest you be cautious when seeking cooperation with your Chinese friend;
Reasonable procurement budget control and accurate production process control to ensure that each process is on the right path, don’t hesitate or be too impulsive;
If you do not have sufficient funds and just want to buy thousands of masks, it is recommended not to purchase directly from China.

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Author:

AQI Service as a Third-Party Quality Inspection Company in China specialized in providing a complete range of inspection service for soft line, hardline, Furniture, bag, Toys, electronic, electrical and home textile as:

DPI (During production inspection)
PSI (Pre-shipment inspection)
Container Loading Supervision
Factory Audit & Supplier Investigation
Barcode and packaging inspection
Product Testing and Compliance Certification