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Helping organisations navigate complexities of supplier consolidation

10 July 2024

A rising number of manufacturing, 3PL, e-commerce and warehouse operations are seeking to reduce their supply base and find single-source solutions

SOUTHGATE GLOBAL has reinforced its commitment to improving supply chain efficiency with the launch of its first white paper on supplier consolidation. It comes as an increasing number of manufacturing, 3PL, e-commerce and warehouse operations are seeking to reduce their supply base and find single-source solutions in a bid to improve efficiency and streamline operations.

The causes of supplier fragmentation 

Southgate Global CEO Dan Brasier explained how the operational and logistics sector, and more specifically industrial packaging and materials handling supplies, have been most prone to supplier fragmentation over the years as historically, suppliers were unable to meet the entire scope of an organisation’s full operational needs. All too often this continues to be the case.

Now, as commercial organisations look to reduce costs by simplifying their supply chains and speeding up efficiency, supplier consolidation is becoming increasingly popular.

"We understand the risks, financial costs and inconsistencies that can arise when using multiple suppliers. Not to mention that it can lead to slower production, different equipment failing to work together seamlessly, increased administration costs, varying quality and an inventory that is more difficult to manage," said Brasier. 

"In listening to such challenges, we decided to proactively address the shift in the market and repositioned Southgate to highlight our ability to offer end-to-end solutions in order to fully meet this need.

"Now we’re looking to use our knowledge and expertise in operational logistics and fulfilment to provide advice and practical solutions to others who are seeking to address supplier fragmentation issues in relation to their packing equipment consumables and servicing needs," he added.
The Supplier Consolidation Evaluation Matrix

Aside from exploring key benefits and actionable recommendations, Southgate’s white paper also includes a Supplier Consolidation Evaluation Matrix. The downloadable tool allows organisations to assess suppliers against a particular set of criteria to guide them through the process of supplier consolidation.

Once scores are generated, users then create a consolidation strategy, which helps businesses identify the expected benefits of refining the number of suppliers they use, whether financial or non-financial.

With a strong strategy in place, organisations are then encouraged to speak to their selected vendor or vendors about pricing, package deal negotiations and discounts.

Looking at the future of the supplier market, Brasier noted: "As logistics challenges intensify, the demand for a supplier offering an integrated end-to-end solution will only grow.

"Building a strong, long-lasting relationship with a single supplier who offers direct and in-direct cost savings and efficiencies, and has a wealth of expertise and resources, will all begin to set operational logistics and fulfilment suppliers apart from one another," he stated. 

Serving over 3,000 customers in more than 20 countries around the world, Southgate prides itself on offering an end-to-end solution, a reliable partner that customers can turn to at every stage.

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