If you have a diverse supply base in traditional terms, you have a pool of suppliers manufacturing different things for you. The different pieces that make up the end product to your company all come together at some point in time. Think of the work, time, and money involved in making this happen; using five suppliers and the associated risk involved to insure everything comes together perfectly. An example of this process is below. I ask that you think of all of the work your company performs and cost incurred when doing business this way?
You outsource the following pieces for your end product through a traditional diverse supply base in process (A) shown below.
Process – A
In the above process you have five different suppliers involved to complete your product. In this scenario your company is generating five different orders at minimum and is incurring all costs involved, from the generation of a purchasing order to paying the invoice. In the above process think of the handling, transportation, time, communication demand and substantial quality risk involved so everything works as planned. What are the total true costs in getting your product? Now, I ask you to consider something going not just right in process A, and the increase of risk and total cost to you?
Taking the above example and using what I call a diverse supplier, Summit Steel & Manufacturing and I ask, what makes sense?
Process – B
What way would you, or are you performing business, using process A or using process B? I believe the choice is pretty clear and if your looking at total cost and controlling your quality and delivery, process B, is the choice I would be using for my business. Supplier diversity is not the amount (quantity) of suppliers available but rather the use of suppliers, such as Summit Steel & Manufacturing, that have unparalleled capabilities, knowledge, and expertise coupled with competency and unwavering customer service.
A truly diverse supplier will provide your company with the following benefits: