It's rarely top of mind until a problem forces the issue. Yet according to a Les Affaires report on the manufacturing sector, the companies that weather price hikes and supply disruptions best are almost always the ones that had already diversified their suppliers before they needed to. Here are three signs it might be time to take a look.
First sign: you order out of habit, not strategy. According to Nancy Jalbert, partner at Raymond Chabot Grant Thornton, many SMEs "buy" their inputs rather than "sourcing" them, meaning they renew the same orders with the same suppliers without ever putting them in competition or renegotiating. Sylvain Tessier, president of ST Marketing, echoes this: many companies have never negotiated with their suppliers, even when buying in bulk. "It might be time to do that," he sums up.
Second sign: a single supplier covers a critical input. That's what happened to Cuisi-n-art, a custom kitchen and bathroom counter and cabinet maker based in Gatineau, when its sole supplier of thermoplastic doors ran into trouble. The company had to quickly turn to new partners, who have since become reliable allies rather than a temporary fix.
Third sign: a price increase or shortage catches you off guard. Before the pandemic, mobile partition manufacturer Moderco, based in Boucherville, relied on just two suppliers for key raw materials like steel and aluminum. When prices spiked in 2021, the company sought out a third, sometimes a fourth supplier depending on the material's importance, allowing it to put suppliers in competition and reduce price volatility.
The common thread in all three stories is the same: diversification works best when it starts before the crisis, not during it. That's exactly what CVDM's matchmaking tool makes possible without months of research. Instead of starting from scratch the day a key supplier falters, members can explore Canadian companies that fit their needs right now, and build that relationship before they need it in an emergency.
Photo: Unsplash / Krisana Nakajo
Source: Les Affaires, Karl Rettino-Parazelli, Diversifier ses fournisseurs pour préserver la marge de profit
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