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Benefits of Dual Sourcing: An Epic Way To Grow Your Business

Warehouse worker stacking goods on a pallet
Dual sourcing will improve your business in a variety of ways. Learn what they are by reading through these articles.
Jacob Lee
June 6, 2022
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The benefits of dual sourcing products are exactly what you need if your only supplier isn’t cutting it anymore. Having more than one source for your products is great, but there will be quite a bit of legwork on your end to obtain a second source. Fortunately, we can guide you on the steps that you’ll need to take. 

There are numerous benefits of dual sourcing that will improve your business operations. Some of the benefits include:

  • Eliminating dependence on one source
  • Giving your supply chain more flexibility
  • Better reach to customers in different regions
  • Increased capacity
  • Improved scalability for your businesses growth

We’ll discuss these benefits in detail and the steps you will need to take to secure your second source. 

What Is Dual Sourcing?

As the name implies, dual sourcing is a form of supply chain management where a manufacturer or business will use two suppliers for a specific product or products. Since dual sourcing can be applied for specific products, manufacturers and businesses could potentially have two sources for a variety of products in their inventory. 

Benefits of Dual Sourcing for a Business

Yard worker inspecting a cargo container

There are many benefits of dual sourcing, which is why this sourcing strategy is so popular amongst businesses. We’ve listed some of the more popular methods that your business will benefit from below. 

Prevents You From Becoming Dependent On One Supplier

Relying on a single supplier will make you dependent on them and thus, put you at a disadvantage. For example, if your supplier is located in another country that experiences a natural disaster or political unrest, there’s a possibility that material shipments might be delayed.  

In other instances, the supplier might take advantage of the fact that they’re the only ones you source certain materials from. Suppliers can do this by raising the price of the materials or products they sell you. 

If any of these scenarios occur, that would cause disruptions for you and your customers. Having multiple suppliers will allow you to fall back on another in case any disruptions occur to one. In turn, your business is less exposed to risk and your customers will be able to get their goods on time. 

Suppliers Are Forced To Innovate

Dual sourcing the materials you need for manufacturing will force your suppliers to innovate. Your suppliers will know that you and many other manufacturers they conduct business with use other suppliers. They will also know that you can easily drop them and find another supplier to source from. Because of this sense of competition, suppliers will continually try to outperform their competitors by innovating the materials and products they provide for you.  

You Can Support More Customers In Different Regions

Having suppliers to source products from in different parts of the country will expand the reach of your operations. Rather than have all of your suppliers send their goods to one warehouse, you can set up another warehouse operation near your second supplier.

Afterward, each warehouse can send out orders to customers in their respective regions. This will help lower the shipping costs that you would normally be spending to ship something across the country. 

For example, shipping products from a warehouse in Florida to California will be much more expensive than from Arizona to California. 

Shipping Between Each LocationEstimated Cost
Los Angeles to Orlando$70.00
Phoenix to Seattle$14.50

More Capacity

Using multiple sources will increase your capacity to fulfill orders. If the business has an increasing customer demand, then having two suppliers to source your materials from might become a necessity. 

One source might not be able to keep up with the customer demand that you have. Therefore, combining the materials and products you obtain from two different sources will allow you to keep up with your order volume. 

Easier To Scale Your Business With

With the increased capacity that you will obtain with two suppliers, you can better scale the growth of your business. Maybe your customer demand isn’t extremely high, but you strive to get there at some point. Using two suppliers to source your materials will give you the ability to manufacture enough goods to sell to more customers.

Growing your business also requires the services of a 3PL like R+L Global Logistics. We help numerous clients with their fulfillment needs and we guarantee we can do the same for you

Looking for a solution to store and ship your products seamlessly? Let R+L Global Logistics be your fulfillment and distribution partner.

How To Find Good Product Sources

Warehouse worker holding a box while walking next to a conveyor belt

Finding another supplier to source your products from might not be too difficult if you already have one. That said, if you’re dissatisfied with your current supplier and the services of a second, then you should know some important techniques that will help you find the best one.  

Determine Your Volume

High order volume is something that we mentioned having two suppliers to source from can help you with. While that might be, you must choose suppliers that can keep up with your order volume. 

If you can’t find suppliers that can do that, you’ll just end up in the same situation you would be in if you didn’t have a second supplier at all. The first thing you need to do before you figure out if a supplier can handle your order volume is to determine what yours is to begin with. 

Once you know your order volume, you can start researching potential suppliers’ ability to keep up with your average volume. In case you can’t find this information on your own, reach out to some suppliers and inquire about how quickly they can come up with products and materials for you. 

Our article on safety stock in the supply chain will help you make sure you have an extra inventory of stock in for when order volume starts to increase. 

Determine Your Timeline

The amount of materials you need to manufacture a product is important, but so is getting it on time. Knowing the timeline between when you order your materials and when they will arrive is imperative.

Potential suppliers will not only need to provide you with enough materials to keep up with your order volume, but they’ll also need to get those materials promptly. Once you know what your timeline is, you can factor that into your hunt for suppliers. 

Where Are They Located

The location of a potential supplier is another important factor that you’re going to have to consider. While you’re probably never going to be lucky enough to have a supplier right next to one of your facilities, you can find one that’s at least in the same geographic region. 

Sourcing materials from a supplier that is far away from your manufacturing facilities will put you at a disadvantage. For one, the further the distance, the more you’ll pay for shipping costs.

A supplier is essential and so is having a 3PL provider that can help with your fulfillment needs. The professionals and services provided at R+L Global Logistics will accomplish that for you. 

Looking for a solution to store and ship your products seamlessly? Let R+L Global Logistics be your fulfillment and distribution partner.

What To Expect When You Dual Source

Box coming down a conveyor belt

There are indeed, numerous benefits of dual sourcing. However, dual sourcing does require some work on your end as the manufacturer. There are also a few things that you should be aware of when you start sourcing materials from a different supplier

Double the Companies, Double the Negotiations

The amount of work that you will have to put in when looking for two suppliers will always be greater than the work you would put in just for one. This means double the research and double the negotiations that you will have to complete with each supplier. When looking for two new suppliers, make sure you make enough profits to justify hiring two suppliers and be ready to put in the effort to form relationships with both. 

Discrepancies Between Suppliers

Even though you’ll have to put in double the work to get two suppliers, don’t expect the experience with each of them to be the same. Every supplier runs its operations slightly differently than the other. Therefore, you need to make sure that whichever suppliers you choose, the operations they run work effectively. 

Inventory Management

When you’re getting products from two different suppliers, you’ll need to have the right inventory management systems in place. With the help of inventory management, you can better track where your products are in your warehouse so you can easily find them. 

Inventory management systems will also help you know how much of a certain product you have. That way, you’ll know when you need to order more of the product or when you have enough. 

Our article on the seven benefits of inventory management discusses more of the benefits of these systems in detail. 

Quality Control Issues

Discrepancies between each of your suppliers could affect the quality control of the products you sell. Quality control is one of the most important aspects of making and selling products. The way a supplier produces a product, all the way down to their quality control standards can differ from one another. 

Customers want the products they purchase from you to have a certain level of uniformity, not products with inconsistent quality. Therefore, you need to make sure that the suppliers you research provide equally good products.  

R+L Global Logistics Can Help Your With Your Fulfillment Needs

We might not be suppliers, but R+L Global Logistics can help you in other aspects of your supply chain concerns. We provide numerous fulfillment services that are second to none including:

  • Cross-docking
  • Kitting services
  • Transload
  • Retail fulfillment
  • Pick and pack

These are just a few, but we offer many more that will satisfy your needs. Fill out your quote today and start doing business with a fulfillment service that will never let you down. 

Looking for a solution to store and ship your products seamlessly? Let R+L Global Logistics be your fulfillment and distribution partner.

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