Is working with just one supplier is the best way to control glove cost? How many suppliers should you have?
At first, this seems like a simple question.
There is no denying the appeal of finding lower cost apparel manufacturing. We all read about the shift of manufacturing to western China and beyond, in search of lower costs. The growth of manufacturing in countries like Thailand, Vietnam, and others are all testament to that.
We also read about manufacturing shifting back to the U.S in some cases. While price is not part of that equation, manufacturing on this side of the world, when feasible, offers other potential advantages.
As with most supply chain questions, it is not as easy as it looks.
If you are thinking about diversifying your supply chain, what else should you consider?
Single vs. Multiple Glove Factory Strategy
The reality is that different glove factories have different strengths.
For instance, a leather glove factory might make beautiful fashion leather gloves, but not be proficient at technical sport gloves … and vice versa. The knowledge and experience base is not interchangable from one factory to the next.When you choose and work with a supplier, you are investing in their experience. When they troubleshoot and solve problems during manufacturing, they are building knowledge, which is not transferrable.
Pros and Cons of Secondary Factories
On the one hand, diversification is a basic business strategy. Diversify your sources, and your risks. It’s just good business not to be totally reliant on one source as the buyer (and for suppliers not to be reliant on any one brand as well!)
Beyond diversification, let’s take a closer look at 5 specific strategic sourcing factors to consider, which factor into whether a secondary glove factory could be beneficial, or not:
1. Easier Cost Comparisons:
2. Capacity Limitations:
You might need to spread your volume around for capacity reasons. While it could involve a second supplier, it doesn't always have to.
For instance, one of our customers gives us a product forecast for a year. When we can plan our production and deliveries well ahead, it results in a very efficient scenario on both sides.
3. Minimum Order Quantities:
When planning for capacity, also keep in mind that difficulty meeting minimum order quantities for parts of your line might require concentrating other parts of it, for leverage.
For instance, a supplier will be in a better positiion to make samples and initial runs of your new product, which is typically unprofitable in the early stages when quantities are small and uncertain, when they can offset this against your more sizable and profitable business.
4. More Flexible Lead Times:
Using secondary factories might help you build inventory faster for an introduction, and provide other needed flexibility for replenishment business.
5. Better Skills Alignment:
When a product line has a very specific manufacturing requirement, the supplier with the specific skills and factory set up to match your need might not be the same as for other production.
For instance, suppose you require a specific technology, such as a heated glove project. Specific technical capabilities of each factory enter this decision mix.
Choosing Your Glove Manufacturers: The Right Mix
To use a simple analogy, it’s like buying gas for your car.
The station in your town is close, but also costs more. A station several miles away is cheaper. A third one also sells milk, ice and propane tank refills ... and is open 24/7. Where do you go?
It depends on your needs!
If you are like most people, your answer is “All three”…
… and that’s precisely our point.
For more insight on arriving at the best sourcing solution, download our checklist: 10 Questions to Ask a Gloves Supplier: A Private Label Sourcing Checklist".
Contact us for a consultation, or leave a comment below!