Key Considerations for Vendor Sourcing Changes

Navigating vendor shifts and supporting smarter sourcing decisions across the supply chain

Today’s market dynamic is fast-paced and shifting quickly, creating varying levels of exposure and resilience across industries. Many companies in the retail sector are proactively adjusting supplier strategies to optimize their production processes.

This includes renegotiation of supplier contracts, resourcing, dual sourcing or other shifts in sourcing strategies, diversifying suppliers, consolidating raw material suppliers and smaller vendors and increasing domestic production where possible.

For retailers, brands and manufacturers of consumer goods considering shifts in vendor sourcing shifts and additional rationalization of the supply chain footprint, the following are top considerations to keep in mind:

• Compliance knowledge: Does the new potential vendor have in-house knowledge of your destination country’s product compliance requirements?
• Quality assurance: When considering an alternative vendor or a dual sourcing strategy, question if the factory is capable of building products to exact specifications while incorporating necessary process oversights and safeguards. How will you evaluate the quality and compliance attributes when comparing the two factories, or the existing factory with the new one? What quality management processes will you implement?
• Product integrity: Shifting to a new sourcing factory can introduce various risks not directly related to safety. These risks can arise from factors such as how products are stored and packaged and the materials used in the packaging process. Additionally, the way products are loaded into containers and the shipping or transportation methods can also affect conditions upon arrival. It is important to consider all aspects of product integrity, which include the possibility of needing additional production monitoring and audits. Any changes in raw materials must also be acknowledged.
• Communication and documentation: Effective communication and documentation are essential in managing potential vendor changes. It is important to implement clear communication strategies and establish control over key documentation.
• Responsible sourcing: Can your new potential vendor meet ethical sourcing requirements and comply with local labor laws?
• Sustainability considerations: What sustainability practices does the vendor or factory have in place, and how do these practices impact the sustainability attributes of your finished product, both now and in the future?

How UL Solutions can help

UL Solutions provides extensive expertise to help you manage compliance, access global markets and evaluate quality throughout your supply chains. Our technical and regulatory experts constantly monitor regulatory updates to understand their impact on product quality requirements. Our worldwide network of laboratories is ready to meet your product testing needs, and our global market access services are designed to help you accelerate speed to market and navigate the complexities of international product safety considerations.