Adopting a structured approach to ensuring production continuity is key to making the due diligence process more manageable and ensuring efficient EUDR compliance. It ensures that key products are prioritized, helping to maintain a continuous production of your company’s goods. There are several product based supplier sampling approaches to ensuring production continuity which you can take to effectively manage your product-based supplier sampling, especially when starting out.
PRIO 1 - Prioritize Key Products
Begin by identifying the most critical products for your business, particularly those that are purchased recurrently. For example, if an automotive manufacturer uses the same components across multiple car models, these parts and their respective suppliers should be prioritized. As these items are essential not only for the production process but also for the final product, focusing on them early will help ensure that key components are addressed effectively.
PRIO 2 & 3 - Focus on Priority Orders
Start by concentrating on orders from the first quarter, particularly for products that are regularly purchased and crucial to the production of your final products. Next, prioritize replacement orders for Q1, which are products that are currently in stock but will need to be replenished by a specific deadline. Lastly, focus on Q2, Q3, and Q4 orders that are essential but can be procured at a later stage.
Selecting the Right Initial Supplier Group: A Guide
Why Pilot Suppliers Matter
Initial suppliers are an essential part of trialling new processes or systems in a controlled environment before a wider implementation. Selecting the right group allows you to gather valuable feedback, identify potential issues, and refine your approach.
This guide outlines three key approaches to selecting your pilot supplier group and explains the typical stages of a rollout.
Approaches to Selecting Your Pilot Supplier Group
You can select your pilot suppliers using one of three primary approaches, each offering distinct advantages:
1. By Region
This approach involves selecting pilot suppliers that are based in a specific geographical area, such as the EU.
Easier coordination: Working in close proximity allows for more frequent and spontaneous interactions, leading to more efficient communication and streamlined logistics for projects and daily tasks.
Shared time zone and language: Operating within the same time zone and speaking a common language significantly reduces potential communication barriers, facilitates real-time discussions, and simplifies scheduling meetings and collaborations.
Local compliance context: Initiating the process in the local region provides a deeper understanding of the specific regulatory landscape, enabling proactive identification and effective addressing of regional legal and cultural requirements, thereby minimising compliance risks.
2. By Relationship
This method focuses on choosing pilot suppliers with whom you already have an established strong relationship.
Faster feedback cycles: The pre-existing trust and familiarity within the relationship facilitate more open, honest, and timely feedback exchange. This leads to quicker identification and resolution of issues.
Lower onboarding friction: The established relationship significantly reduces the initial setup and integration challenges, making the onboarding process smoother and more efficient.
Ideal for trialling early onboarding steps in a low-risk setting: This environment offers a secure and controlled space to experiment with and refine new processes without the risk of major disruptions or negative impacts on larger operations.
3. By Criticality
The Criticality approach means selecting pilot suppliers that are most critical to your production.
Surfaces the most urgent risks and compliance gaps early: By concentrating on key suppliers, you can proactively identify and address the most significant potential issues before they escalate, preventing major disruptions.
Ensures readiness where supply disruption would have the biggest impact: This guarantees that your most critical supply chains are thoroughly evaluated for resilience and prepared to adapt to unforeseen changes, minimizing the consequences of any potential disruption.
The Initial Rollout Process
Regardless of the selection approach you choose, the overall rollout typically follows a four-stage process:
Initiate: This is the initial phase where the new system or process is introduced to the selected pilot supplier group.
Evaluate: During this stage, the performance and feedback from the pilot group are thoroughly assessed.
Adjust: Based on the evaluation, necessary refinements and improvements are made to the system or process.
Full Rollout: Once adjustments are complete and the system is deemed ready, it is implemented across the broader supplier base.
By carefully considering these approaches and understanding the rollout stages, you can effectively select your initial supplier group and set the foundation for a successful wider implementation.