The crisis in the global supply chain is disrupting many small and medium-sized manufacturers (SMMs) in new ways that are less directly related to the pandemic. In many cases around the country, manufacturers are not being threatened by a lack of demand for their products but by the inability to get materials in order to produce them.
For example, in North Carolina, furniture makers are challenged in not only finding adequate lumber but also textiles. Those resources are in growing demand for several other industries. The furniture makers undoubtedly need to expand the scope of their efforts to find needed materials.
The fast-changing supply chain dynamics have led to a greater demand for supplier scouting – which is essentially identifying domestic products and capabilities. Supply chain issues can be daunting, but the good news is that some SMMs are using supplier scouting to overcome supply chain disruptions and make connections they never would have considered in the past. They are broadening their horizons beyond the niche they know well.
The Importance of Relationship Capital for SMMs
The early lessons SMMs learned in the pandemic were that they needed to be agile in adjusting processes to accommodate worker safety considerations and leveraging their networks in order to find the necessary personal protective equipment (PPE). Those same dynamics exist for supplier scouting, though you can make a case that a manufacturer’s relationship capital is of even more importance.
Relationship capital is the value of a manufacturer’s relationships with its customers, suppliers, vendors and stakeholders in the marketplace. It is difficult and time-consuming for SMMs to build and maintain relationships, but success in supplier scouting will come from manufacturers who invest more in domestic suppliers to solve their shortages.
But finding a new source of supplies is not easy for many resource-challenged SMMs that are occupied with their own operation and deal in relatively narrow networks associated with their specialties. They don’t necessarily know where to turn for certain supplies since existing online databases are often out-of-date, offer limited scope into specific production capabilities and require a lot of time to locate suppliers that meet their needs.
Benefits of Supplier Scouting Include Reducing Risk, Networking
While an SMM’s introduction to supplier scouting might come from a custom or one-time need, it opens communication lines to much bigger possibilities. Benefits for manufacturers who source from within the U.S. include:
- More transparency and control of their supply chains, which can improve quality control, flexibility and time to market, while – lowering supply chain risk that often comes from offshore production.
- Producing near the consumer often reduces total costs by shortening supply chains and contributing to a lean and agile strategy, with reduced waste.
- Raising awareness about manufacturers and their capabilities, and that leads to organic growth in networking.
- Tapping into a large network of local and regional supply chain stakeholders, from your local MEP Center to trade, economic development and workforce development organizations and local and regional government agencies that might have timely incentives.
- Providing more access to market research, which is a key component of scouting. Many SMMs have long avoided market research and relied on their existing networks built through sales and trade shows.
- Helping find ways to diversify their customer or product base to help future-proof the business.
Market research should not be underestimated for determining opportunities; it can provide a payoff at earlier stages of emerging and changing markets, provided a manufacturer understands how their capabilities might be put to use in those markets.
How the MEP National Network Supplier Scouting Process Works
The MEP National Network Supplier Scouting program works like this: a manufacturer seeking a new supplier contacts its local MEP Center, which shares the details and technical requirements of the opportunity across the MEP National Network — 51 MEP Centers located in all 50 states and Puerto Rico, with over 1,400 trusted advisors and experts at more than 385 MEP service locations.
Local MEP Center staff reach out to their networks as a sort of matchmaker. Any interested suppliers are put in touch with the sponsoring MEP Center, which begins a dialogue with the various parties.
Supplier Scouting Success Story Illustrates Power of Networks
One success story is a good illustration of how networking and relationships can be so critical for solving supply chain issues. A food manufacturer in Puerto Rico was looking for food packaging containers, and a team member from the North Carolina MEP Center reached out to a local packager, knowing that the company did not have that capability locally but perhaps did at one of their other facilities elsewhere in the country.
Her contact at the food packaging company referred her to a company sales agent in Florida, who ironically had been trying to get into the Puerto Rican market. The matchmaking worked, and the companies are now doing business.
Your Local MEP Center Can Be Your Trusted Advisor
Your local MEP Center is a trusted advisor for SMMs looking to get into supplier scouting, whether it’s for immediate problem-solving or growing their business. Your local MEP Center staff has the technical industry knowledge, expertise, market understanding and multiple network connections to support those efforts.
Manufacturing opportunities are found where operational capabilities meet potential prospects’ needs. Contact your local MEP Center to get started.
Anna Mangum serves as a regional manager for the North Carolina Manufacturing Extension Partnership (NCMEP), administered by North Carolina State University's Industry Expansion Solutions (IES). Anna has a diverse private and public industry background in which she has worked with manufacturers, healthcare and government in support of economic development.
Anna has served in several positions over her 13 years as part of NCMEP, including program lead for sustainable manufacturing and as an EHS specialist. Anna has a B.S. in environmental technology, with minors in environmental toxicology and environmental science from North Carolina State University.