Following can be done: 1. Understanding whether the material is from sole source or multiple source. In case its a sole source, the risk is higher priority than cost 2. Evaluate what will the future estimated forecast and how crucial is the material (whether its used in multiple projects) 3. Analysis of the financial budget whether the company is able to afford the material over the next few years 4. Navigating alternate options which includes alternate source, Contract manufacturer, in house manufacturing etc.

Assess suppliers comprehensively, considering financial stability, quality control, delivery reliability, and cost. Utilize a total cost of ownership (TCO) approach and data analytics to model scenarios and their impacts on cost and risk. Implement a tiered supplier strategy, consider dual sourcing for key materials, and invest in supplier relationship management. Regularly review and adjust the supplier portfolio based on performance metrics and risk factors. Explore options for vertical integration or strategic partnerships to gain more control over critical supply elements.

When balancing costs and risks with suppliers, it is best to avoid this risk from the beginning. Strictly screen suppliers. I will share how to find a reliable Supplier. This process involves two main questions: Where to find suppliers? What kind of suppliers to look for? Taking the jewelry industry as an example: Online channel:1688 |Alibaba |Made-in-China | Global Sources These are professional B2B platforms. Offline : Visiting industrial clusters directly can provide a more authentic experience, China has three major clusters: Qingdao: Known for Korean designs and handmade accessories Yiwu: China's small commodities capital, known for affordable prices Guangzhou/Shenzhen: Strong in Stainless steel jewelry. Since limited characters..

My approach involves a multi-faceted strategy: 1. Comprehensive Evaluation: I conduct thorough due diligence on potential suppliers to assess not just cost, but also reliability, quality, and compliance risks. 2. Diversification: To mitigate risks, I diversify our supplier base. This doesn’t just spread the risk but also gives us leverage in negotiations, ensuring we are not overly dependent on any single supplier. 3. Contract Flexibility: I negotiate contracts that include clauses for performance reviews, and contingencies, which allow for adjustments based on market conditions and supplier performance.

Here are some strategies to navigate the balance between cost and risk in supplier sourcing: Risk Assessment: Evaluate potential risks associated with each supplier, such as financial stability, quality control, and geopolitical factors.   Cost-Benefit Analysis: Conduct a cost-benefit analysis to determine the long-term costs and benefits of sourcing from different suppliers. Supplier Diversification: Diversify your supplier base to reduce reliance on any single supplier and mitigate risks.   Negotiation.   Supplier Development.   Performance Metrics.   Contingency Planning.   Collaboration.   Long-Term Perspective. Decision-Making Framework.

Navigating the balance between cost and risk in supplier sourcing involves a strategic approach. Start by conducting thorough market analysis to understand price trends and quality benchmarks. Implement stringent supplier evaluations focusing on compliance, reliability, and production capabilities. Opt for suppliers that meet these criteria, even if they are not the cheapest. This strategy minimizes risk and often reduces long-term costs due to fewer quality issues and supply disruptions. Always have contingency plans and foster strong relationships to negotiate better terms, ensuring a resilient supply chain.

-Analyst the Import RM data of last one year trends and compare with the last one year spot price data -Try with maximum material to purchase with formula cost you will definitely get the cost saving in next year