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Why do I need to diversify my company’s supply chain?

On Behalf of | Aug 29, 2022 | Business Consulting & Advice |

Businesses all across America are doing their best to stay active and relevant as our country faces the current recession. One of the ways in which they are doing this is by diversifying their supply chains. While this is a great way to make suppliers compete for your business by driving down costs, the end goal is to grow your bottom line while ensuring that your customers are happy.

A diverse supply chain benefits your customers by offering them a quality product at the best possible price. This also allows your business to meet your consumers’ needs as they are brought to light. As those needs change, you have new, high-quality products available to them. Thus, the “supply and demand” cycle grows stronger and creates more and more profits for your company.

Ultimately, a lack of diversity in your supply chain can lead to massive problems. In recessions, businesses can close abruptly. If your main (or only) supplier suddenly closes shop, you could leave your own customers in the lurch. That could damage your reputation and cost your company both its existing business and future business.

Tips to help diversify supply chains

Here are some ways to successfully implement diversity in your supply chain:

  • Promote free trade. The United States has long been a champion of free trade products such as free trade coffee and chocolate from one of the many small suppliers in African villages
  • Promote sustainable suppliers. The trend toward sustainability to protect our environment is rapidly growing. Businesses that make an “ethical” choice to recycle and reuse materials are in demand, especially with the Millenial crowd.
  • Have built-in redundancies among your suppliers. By having a diverse supply chain that uses more than one supplier for your raw materials or products, you have several options from which to choose if one of the suppliers is running low on something that is in demand.

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