Arena Blog

Deciding when a new product line means a new supplier

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If you’ve had any luck with your first product, chances are you’re beginning to think about adding a second product to your line.

Last year, we found that nearly 47% of manufacturers polled in Arena’s 2011 manufacturing survey plan to introduce a new product into their current market, and 42% of those manufacturers intend to add one or more suppliers to help handle the new line.

When it comes to manufacturing a new product, there are several things you need to consider. Most importantly, should you manufacture your new product using your existing supplier or bring in a new supplier exclusively for your new product? 

If you choose to work with your existing supplier to build your new product, you may face a simpler process with fewer errors and miscommunications than if you begin working with a new supplier. Staying with your existing supplier may also mean you’ll encounter fewer new personalities and hand-offs, thereby minimizing the number of complications that crop up.

But don’t shy away from exploring alternative supply partners if you think there is real opportunity to improve the status quo. Diversifying your supplier relationships inherently reduces your supply chain risk over time and opens up the opportunity for newer, cheaper and more effective processes. The quality of your product, and your bottom line, may both stand to benefit.    

Below is a simple exercise to help you decide.

Which column best describes your business?

Column A

Column B

You feel confident in your ability to source back-up components if necessary

You feel the need to reduce your overall supply chain risk

Your organization is feeling strapped for resources

Your customers are time-sensitive

Your products share certain tooling, materials or assembly procedures

Your products largely use distinct components and manufacturing processes

You have strong relationships with your current suppliers and have confidence in their ability to scale and adapt

You do not feel particularly invested or connected with your existing supply partners

Figured out which column best describes your business?

Learn what it means and how it should influence your decision with our step-by-step guide to optimizing your production for multiple product lines.

In this guide, you’ll find a breakdown of the benefits and setbacks of each choice, and the smartest plan of action for whichever choice you make. Check it out today

About the Author

Alyssa Sittig

Alyssa played an instrumental role in the development of the Arena Blog and social media channels from 2011 to 2012. Joining the team with a background in public policy, Alyssa ...

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