For Small and Medium-sized Businesses | 10 Strategies and Tips to Find, Negotiate and Plan for Raw Materials in 2022
Products listed are available on our website. You can schedule a call with Ingredient Depot by clicking the link in the description below. This is a free service for all your raw materials needs. And not a sales call.
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SMALL & MEDIUM-SIZED BUSINESSES
Ok, you have probably transitioned from starting a product at home to building a company. I am happy to share these ten Strategies and Tips for 2022 with you.
1/ Being organized.
- If you are transitioning from selling 1 product to a small or medium-sized business, you will find this a big change. It requires applying the lessons you have learned into a structured and organized system.
In this new world of limited face-to-face interactions, video conferencing will create familiarity and better information sharing.
Email is great for certain communications. But manufacturing goods using Raw Materials requires attention to details that email at times is lacking.
It is easy to take a conversation sideways, especially when you are having general discussions about a subject.
2/ Have compliance or regulatory information available a click away. The information should always be up-to-date and available to share with collaborators and employees. Revisions, recalls, or changes to your licensing should be archived and shared.
3/ Your product will probably go through changes. Improvements either on the formulation side or imposed by compliance. Formulation versions should be documented and archived. Include communications with your collaborators and co-workers.
4/ Manufacturing a product from Raw Materials. With shortages and last-minute surprises with Raw Materials, Bottles, Boxes, Closures and Packaging, You will need to communicate more often different scenarios with your private manufacturing or your team if you are the manufacturer.
- Have pre-designed worksheets that include your formula and list the raw materials with set quantities. This will allow discussing effortlessly changing scenarios pre-production.
If your product is also sold in bulk example: You have master boxes of 48 bottles.
- Create a 2nd set of pre-designed wholesale worksheets for a master box of 48 bottles.
5/ Your Raw Materials information should be archived and organized. Again, with 2022 shortages and last-minute surprises, it is advised to list all the Raw Materials you use. Categorize the information in advance in different ways.
- Supplier "A," make a list.
- Supplier "B" prepare another list.
- Then, by recipe, have the raw materials listed.
- By product or brand.
The particularity of your company requires the information to be tailored accordingly. It will save you time as you are certain to make decisions in changing scenarios.
6/ Prepare yourself like Large Corporations. Plan for disruptions and surprises; it could make your year. We know the supply of plastic remains tight as we start 2022. Create what-if scenarios for plastic-related items like Bottles, Closures, Liners and Packaging.
We also know the supply of some Raw Materials will continue to be tight in 2022. Try and think out of the box. Possibly create a different formula with an alternate raw material that is not in limited supply. Actively work on adding new suppliers. And improve existing relationships with suppliers.
7/ Small and Medium Size businesses are flexible. Finding new suppliers is easier than you think. Working with new suppliers will mitigate the risk of being caught off-guard for 2022. We have found that the companies finding their way are creative yet patiently aggressive.
8/ On-hand Inventory levels. Evaluate if increasing on-hand inventory for your most stable products makes sense. Suppose some of your products or brands are stable. First, evaluate the strength of your compliance, manufacturing and sales.
- Then maybe increasing on-hand inventory levels makes sense.
When cash flow does not permit increasing or maintaining higher than usual inventory levels for your stronger products:
- Then maybe that is your goal for 2022.
9/ If possible, interact with your suppliers more often. At times we are frustrated at higher prices and shortages from our suppliers. Know that most companies are going through these same challenges.
10 for 2022/ Is reinforcing your company, products and brands the right objective?
We see Companies getting closer with their compliance, formulation, regulatory, manufacturing and suppliers. Yes, closer relationships, but also geographically closer. Moving away from manufacturing products outside the Country. We see these companies marketing creatively: Made in the USA or Made in Canada.
Adding new products or brands with shortages and price increases could be a risky proposition.
Evaluating your company infrastructure might be the wise thing to do for 2022.
It will be interesting to see how 2022 unfolds.
We do see signs that things are getting better. But some Raw Materials, Bottles, Boxes, Closures, Liners and Packaging will remain under pressure for the foreseeable future.
If we had to give two pieces of advice:
- Expect last-minute surprises.
- Plan in advance for shortages.
And if you operate a Starbucks, please stop announcing the suspension of our favourite products.
Products listed are available on our website. You can schedule a call with Ingredient Depot by clicking the link in the description. This is a free service for all your raw materials needs. And not a sales call.
Thank you for reading.