Supply chain management professionals balance the needs of building a robust network of suppliers while optimizing vendor count. In recent years, supply chain consolidation has been a directive for procurement leadership due to the aggregation of massive supply lists beginning with the onset of ERP and MRP database systems. How can a buying team reduce management burden while maintaining a responsive and qualified fulfillment base?
More Suppliers Equals More Operational Burden
As a supply chain manager, reducing uncertainty in manufacturing is critical, and often a long list of vendors does not directly equate to reduced headaches. With every new supplier comes maintenance in NDAs, vendor forms, updates in manufacturing capabilities, and certifications. Many of these tasks are done annually and require their own systems to track and manage. Some companies track supplies with scorecards, which show how suppliers have performed across various metrics like responsiveness, quality, and on-time delivery for each order. As individual suppliers increase, these tasks can become tedious and consume a large percentage of a buyer’s day.
While additional suppliers offer more manufacturing diversity, the custom manufacturing supply chain overall becomes unwieldy instead of elastic. Inefficiencies develop when managing lists becomes a greater focus than strategic, value-added sourcing.
Too Few Suppliers is More Risk
On the other hand, if a team has too few suppliers onboarded, they may have challenges in finding available manufacturing capacity and diversity in manufacturing capabilities. Many individual manufacturers have a sweet spot, which is a talent set that their facility is well equipped to handle. Although their equipment may be able to perform other manufacturing tasks, the pricing or throughput may suffer if they accept the work. Without a diverse network of manufacturers, there may be expense overages or time delays when work is performed serially, and not in parallel. In critical events, such as a power outage or machine breakdown, an entire project can be delayed.
There is also the unknown factor of a given supplier’s capacity when sourcing parts. A vendor may be readily available to start work on one day, and they may require significant lead times or expedite costs in another instance if they are running at capacity on another day. Suppliers may quote varying prices and lead times that are often opaque in their reasons, leaving more work for purchasing teams to decipher which vendor gets the purchase order. This model leads to an inflexible supply chain instead of the optimal elastic supply chain for custom manufacturing.
Manufacturing as a Service Provides Supplier Consolidation without Added Risk
The benefits for multiple suppliers and combined with a diverse range of manufacturing capabilities can be found in digital manufacturing networks like Xometry. Xometry is the largest online marketplace for custom manufacturing, using advanced AI-driven solutions to connect buyers with suppliers on a global scale. With over 4,000 manufacturers on its network, Xometry has a proven track record of being a single vendor and source with dramatic supply chain benefits without the trade-offs due to its distributive manufacturing approach.
Xometry provides an elastic custom manufacturing supply chain by cutting the lead time for custom manufacturing quotes to seconds instead of days through an intuitive and free quoting platform. Then, engineers, designers, and sourcing teams can purchase the quoted work instantly, and Xometry matches the project needs with qualified suppliers who can take the work on demand. This method of connecting buyers and suppliers through a marketplace is called Manufacturing as a Service, or MaaS, and has revolutionized sourcing for custom parts.
Using a MaaS platform, the supplier benefits by seeing a transparent offer of a price, scope of work, and lead time. If the supplier is at capacity, they can simply pass on the work, allowing another capable manufacturing partner to perform the job. With hundreds of manufacturers qualified for each custom manufacturing project, there is integrated redundancy within the manufacturing marketplace. With diverse capabilities, an excellent supplier base, and a skilled support team, Xometry offers an elastic supply chain with a level of quality assurance expected by customers like BMW, GE, Dell, and Bosch.
By being a one-stop shop, a customer can simply go to Xometry, configure their quote, and press order. Xometry takes care of the rest. This includes sourcing of complex components made using multiple technologies and finishes. By continuing to have the best manufacturers on its network, and investing in more technologies and offerings, Xometry is a leading supply chain consolidator without a downside to quality, capacity, or capabilities.