Product Sourcing Best Practices

When a product is refused or seized at the border, most people jump straight to asking what was wrong with the goods? But the better question is what broke down in your process before that shipment even left the supplier’s facility? Compliance is not only about what's in the box” or what is printed on the label. It is also about who you are doing business with, how well you know them, who has had access to the box, and whether you can trust that the paperwork matches reality. Sometimes, it is not the product that triggers a seizure. It is the involvement of a flagged party or a questionable transaction. To reduce the chances of costly delays or seizures, companies need to focus on full compliance at every step. That includes having accurate labels, correct country of origin markings, valid certificates, knowing your supply chain, and making sure the product is not violating the rules of any federal agency. Customs enforces more than just customs law. If your product violates FDA, EPA, DEA, CPSC, USDA, “ABCD” requirements, it is at risk. Many companies miss this entirely. Want to see what this actually looks like in practice? I explain it all here: https://lnkd.in/ekAZPMkZ #FDACompliance #CustomsSeizures #ImportLaw #ProductLabeling #CBP #RegulatoryStrategy

More than half of Salesforce’s most strategic suppliers — based on the amount the $38 billion software company spends on their goods and services — have agreed to cut their greenhouse gas emissions as part of binding provisions in their contracts. Those clauses are part of the Salesforce Sustainability Exhibit, introduced four years ago in May 2021 as an amendment to the company’s standard contact. Many large companies actively encourage suppliers to reduce emissions through science-based targets, and some offer educational resources and technical assistance to help. Salesforce remains unique in codifying those commitments as part of its procurement process, although customer service software company Zendesk — a Salesforce supplier — was inspired enough by the approach to introduce a similar set of contract clauses in November 2024. Best practices for companies interested in shaping similar programs: ➡️ Get procurement teams involved. They can help prioritize engagement and signal which suppliers might find new requirements difficult to meet. ➡️ Provide technical support. Many companies, especially smaller ones, will need an education on the concept of net zero. ➡️ Offer options. Allow suppliers to choose the emissions reduction path that makes the most sense for their business rather than dictating a one-size-fits all approach.  ➡️ Look for ways to support supplier investments. For example, a corporation could motivate supplier investments in renewable energy or lower-emissions materials through better procurement terms. Lessons from Salesforce’s unique contracting process: https://lnkd.in/eHZ7qGvm Cooper Wechkin Louisa McGuirk Serena Ingre Emily Damon Amy Garber

Dollar Tree’s $200M tariff problem is a preview of what’s coming for all U.S. retailers and Dollar Tree responded with a masterclass in real-time supply chain strategy. Tariffs added $70 million in unexpected costs last quarter for Dollar Tree Stores. Over the full year, they expect the impact could hit $200 million. For any business, that’s a massive blow to profitability. But what stood out wasn’t the challenge, it was the response. To mitigate these pressures, Dollar Tree is activating a five-pronged strategy it has refined over the past several years. These levers include: → Negotiating with suppliers → Respec’ing, or modifying, products to lower the cost → Shifting country of origin → Dropping noneconomic items → Leveraging their expanded multi-price capabilities to pass along selective increases Dollar Tree used these levers to offset 90% of the initial 10% tariff announced in February and is actively applying the same strategy to subsequent tariff changes. The company’s approach is a good example of how agility is not optional, it’s existential for many companies. Especially in a world where policy risk, geopolitical shifts, and supply chain disruptions continue to arrive unannounced. At the heart of Dollar Tree’s strategy is its longstanding commitment to sourcing products at the lowest landed cost. While China remains an important part of its supply chain, the company is actively diversifying its sourcing footprint and is prepared to further shift origin points as tariff conditions evolve. Despite rising tariffs, global sourcing remains a foundational pillar of its business model, enabling Dollar Tree to consistently deliver value, convenience, and discovery to its customers regardless of the broader macroeconomic or policy landscape. Lesson: When the storm hits, it’s too late to build a boat. Build your playbook in calm waters.

I'm seeing a fundamental shift that's making some procurement professionals uncomfortable—and others extremely successful. The old playbook said: "Build long-term partnerships. Nurture relationships. Loyalty creates value." The new data tells a different story. Here's the uncomfortable truth: While companies with diversified supplier ecosystems recovered 73% faster during recent disruptions, those clinging to "strategic partnerships" got stuck with prolonged vulnerabilities and zero options when things went sideways. What the winners are actually doing: Organizations practicing dynamic sourcing achieve 12-18% better cost outcomes than those locked into traditional partnership models. But it's not just about savings—it's about not being held hostage. Consider how market leaders really operate: Netflix didn't build streaming dominance through studio loyalty. They said "thanks, but we'll own our content now" and crushed the competition. Amazon didn't create supply chain resilience through exclusive relationships. They built supplier ecosystems that let them pivot instantly when conditions change. Apple doesn't reward suppliers for tenure. They maintain brutal performance standards and it shows in their margins. 67% of procurement leaders report AI-enhanced supplier selection beats relationship-based decisions (PwC) Peer networks now influence 84% of B2B purchase decisions vs. 31% for analyst reports (TrustRadius) Ecosystem approaches show 23% higher procurement ROI But here's the reality: Your boss might still be old-school. Your organization might resist change. So start small. Run pilot programs. Test ecosystem approaches on non-critical categories. When you deliver measurable outcomes, the conversation shifts from "why change?" to "how do we scale this?" The most dangerous phrase in procurement? "But we've always worked with them." The most successful procurement teams ask: Are we optimizing for comfort or outcomes? Does our supplier strategy create resilience or dependency? Own your outcomes. Lead with data. Show, don't tell. The future belongs to procurement professionals who act like owners, not vendor relationship managers. Drop a 🔥 if you've been burned by "trusted partners" or comment "ecosystem" if you're ready to flip the script.

How Can Sustainability Reshape Supply Chains? When you think about supply chains, do you see them as a system of endless transactions or a powerful avenue to drive sustainable impact? 🤔 I recently came across an insightful conversation with Steve Bernard, a CU Denver sustainability program alum with a decade of experience in supply chain management. His journey shows how sustainability isn’t a checkbox it’s a continuous path of collaboration, innovation, and improvement. Here’s a roadmap to integrating sustainability into supply chains, based on Steve’s reflections and my own experience as a sustainability professional: 🛠 The Five-Year Roadmap to Sustainability in Supply Chains 1️⃣ Set Clear Principles: -Publish sustainability principles and codes of ethics. -Share them with suppliers to set expectations early. 2️⃣ Assess and Align: -Conduct sustainability assessments for suppliers. -Use tools like CDP or collaborate with third-party evaluators. -Ensure alignment with your company’s mission and goals. 3️⃣ Build Relationships: -Foster open communication with suppliers. -Collaborate on goals rather than enforcing compliance-only approaches. 4️⃣ Integrate Sustainability into Contracts: -Include sustainability requirements in supplier agreements. -Recognize this as a long-term process—3 to 5 years for full integration. 5️⃣ Track and Improve: -Establish baselines to measure progress. -Use benchmarks and continuous improvement practices to evolve. 🌟 What Should You Ask of Suppliers? Here are key areas companies can address when working with suppliers: 🔵 Environmental Impact 🔵 Health and Safety 🔵 Stakeholder Engagement 🔵 Circular Economy Practices 💡 Why It Matters Sustainability isn’t just good for the planet—it’s good for business. Studies show: 🌱 88% of consumers are more loyal to companies that support environmental issues. 📈 Companies with strong ESG programs see higher employee retention and satisfaction. 💰 Businesses practicing sustainability often realize long-term cost savings through efficiencies and innovations. 🏆 A Balanced Approach: Carrots, Not Sticks If you’re starting this path, remember: 🌟 Progress takes time. 🌟 Collaboration drives success. 🌟 Transparency builds trust. What do you think? Have you faced challenges aligning sustainability with supply chain practices? #Sustainability #SupplyChain

𝐑𝐞𝐟𝐥𝐞𝐜𝐭𝐢𝐧𝐠 𝐨𝐧 𝐚𝐥𝐥 𝐭𝐡𝐞 𝐬𝐮𝐩𝐩𝐥𝐢𝐞𝐫𝐬 𝐈’𝐯𝐞 𝐬𝐨𝐮𝐫𝐜𝐞𝐝, 𝐨𝐧𝐞 𝐭𝐡𝐢𝐧𝐠 𝐢𝐬 𝐜𝐥𝐞𝐚𝐫: 𝐩𝐫𝐨𝐜𝐞𝐬𝐬 𝐦𝐚𝐭𝐭𝐞𝐫𝐬. Taking shortcuts can lead to wasted money and a world of headaches downstream. (𝘙𝘢𝘪𝘴𝘦 𝘺𝘰𝘶𝘳 𝘩𝘢𝘯𝘥 𝘪𝘧 𝘺𝘰𝘶'𝘷𝘦 𝘦𝘷𝘦𝘳 𝘣𝘦𝘦𝘯 𝘢𝘴𝘬𝘦𝘥 𝘵𝘰 𝘧𝘢𝘴𝘵-𝘵𝘳𝘢𝘤𝘬 𝘙𝘍𝘗 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴, 𝘰𝘳 𝘩𝘢𝘥 𝘭𝘦𝘢𝘥𝘦𝘳𝘴 𝘱𝘶𝘴𝘩 𝘧𝘰𝘳 𝘤𝘦𝘳𝘵𝘢𝘪𝘯 𝘴𝘶𝘱𝘱𝘭𝘪𝘦𝘳𝘴, 𝘪𝘨𝘯𝘰𝘳𝘪𝘯𝘨 𝘮𝘢𝘵𝘦𝘳𝘪𝘢𝘭 𝘳𝘪𝘴𝘬𝘴?!) 𝐖𝐡𝐚𝐭 𝐈'𝐯𝐞 𝐥𝐞𝐚𝐫𝐧𝐞𝐝: 💡 𝙁𝙤𝙘𝙪𝙨 𝙛𝙞𝙧𝙨𝙩: Be specific about your needs in RFx docs. If you’re unclear, suppliers will be, too. Before going to RFP, always have quantifiable evaluation criteria finalized and approved by the Spend Owner. 💡 𝙄𝙩’𝙨 𝙣𝙤𝙩 𝙟𝙪𝙨𝙩 𝙥𝙧𝙞𝙘𝙚: The cheapest option often costs the most in the long run. Prioritize value over price. Suppliers who price things materially lower than benchmark norms usually cut corners somewhere to meet margins. 💡 𝘾𝙝𝙚𝙘𝙠 𝙧𝙚𝙛𝙚𝙧𝙚𝙣𝙘𝙚𝙨 𝙩𝙝𝙤𝙧𝙤𝙪𝙜𝙝𝙡𝙮: Source independent references via your network. Past performance tells the real story. Ask the right questions and listen closely to the answers.  💡 𝙏𝙝𝙞𝙣𝙠 𝙖𝙝𝙚𝙖𝙙: Can the supplier grow and evolve with your business? Are they innovative and flexible? Does their company culture and ways of working align with yours?  💡 𝙆𝙣𝙤𝙬 𝙩𝙝𝙚 𝙧𝙞𝙨𝙠𝙨: Most suppliers come with some level of risk, the key is understanding and managing it. Conduct due diligence on short-listed suppliers. Outputs should inform the down-selection process, with material deficiency action items included in the contract. 💡 𝘾𝙝𝙤𝙤𝙨𝙚 𝙥𝙖𝙧𝙩𝙣𝙚𝙧𝙨, 𝙣𝙤𝙩 𝙫𝙚𝙣𝙙𝙤𝙧𝙨: The best suppliers care about your long-term success and aligning with your goals.  Look at proposals holistically, thinking beyond the transaction and into value creation. 𝐇𝐞𝐫𝐞’𝐬 𝐭𝐡𝐞 𝐭𝐡𝐢𝐧𝐠: Looking back, I’ve been at firms in seasons where costs were prioritized over total value, often leading to short-term gains but long-term challenges. There were times I should’ve taken a firmer stance about material supplier risks identified and bias in the selection process.  As procurement peeps, we provide recommendations based on long-term value, risk management, and partnership potential. This includes having the courage to speak up with informed and actionable guidance when things don't pass muster. The goal is to ensure sourcing outcomes build a foundation for success, not just a quick win. 📢 𝙋.𝙎. 𝙒𝙝𝙖𝙩 “𝙨𝙘𝙝𝙤𝙤𝙡 𝙤𝙛 𝙝𝙖𝙧𝙙 𝙠𝙣𝙤𝙘𝙠𝙨” 𝙨𝙤𝙪𝙧𝙘𝙞𝙣𝙜 𝙡𝙚𝙨𝙨𝙤𝙣𝙨 𝙬𝙤𝙪𝙡𝙙 𝙮𝙤𝙪 𝙨𝙝𝙖𝙧𝙚 𝙬𝙞𝙩𝙝 𝙮𝙤𝙪𝙧 𝙮𝙤𝙪𝙣𝙜𝙚𝙧 𝙥𝙧𝙤𝙘𝙪𝙧𝙚𝙢𝙚𝙣𝙩 𝙨𝙚𝙡𝙛?

It is now clear that peak globalization is over and that the upcoming decade will be defined by mercantilist industrial policy on all sides. While we can argue about what tools of industry policy are appropriate for the US and how they should be applied, the bottom line is that we are officially in a new era. Leaders and supply chain execs need to quickly move past “what is happening” and “why is this happening” to “what do I need to do about this to ensure the success of my business for the next 25 years.” These are some of the best practices we are seeing:  • Wait and see is the wrong strategy. Speed to relationship with new suppliers is critical, especially in categories where there is limited domestic capacity.  • Lean in to relationships with your current US suppliers, they are getting more inbound demand and you need to stay a priority. • Dual source or align secondary sources of supply on as many components as possible. Single-source is too big of a risk, even for your US suppliers. • Weigh production ramp lead times vs. total cost of ownership with overseas purchases to prioritize the highest-impact work transfers. • Look at your team and processes to ensure you have the ability to get quotes from multiple suppliers quickly. Agility will be key as tariff rates continue to shift. Don’t miss the moment, market share will be won and lost in the next 3-6 months. Read our full perspective here: https://lnkd.in/gJHXYFcF

During times of tariffs and trade uncertainty, e-commerce businesses face significant challenges, including increased costs due to import duties, unpredictable pricing for goods, potential delays in shipments, and consumer anxiety about price fluctuations, often leading to hesitant buying behavior and impacting overall sales and business planning. Key impacts on e-commerce during tariff uncertainty: 1. Higher product prices: Tariffs directly increase the cost of imported goods, forcing e-commerce sellers to raise prices for consumers, which can lead to reduced demand, especially for price-sensitive items. 2. Supply chain disruptions: Fluctuating trade policies can lead to delays in shipments, causing inventory issues and impacting delivery times, potentially frustrating customers. 3. Market volatility: Uncertainty about future tariff changes can make it difficult for e-commerce businesses to plan inventory levels and pricing strategies, leading to potential losses if they miscalculate market trends. 4. Consumer hesitation: When consumers are aware of potential price increases due to tariffs, they may delay purchases, leading to decreased sales for e-commerce businesses. 5. Shifting sourcing strategies: Businesses may need to explore alternative sourcing options to mitigate tariff impacts, potentially requiring new supplier relationships and logistics adjustments. How e-commerce businesses can navigate and action tariff uncertainty: A1. Transparency with customers: Clearly communicate price changes to customers, explaining the impact of tariffs on product costs. A2. Diversify sourcing: Explore options to source goods from multiple countries to minimize dependence on a single source impacted by tariffs. A3. Inventory management: Optimize inventory levels to manage fluctuations in demand and potential supply chain disruptions. A4. Data analysis: Monitor market trends and customer behavior closely to adapt pricing and product offerings accordingly. A5. Engage with policymakers: Stay informed about trade policy developments and advocate for policies that support e-commerce businesses.

Suppliers can make or break a Procurement team. And yet, supplier relationship management (SRM) remains an underutilized tool for many teams because of lack of time, resources, or know-how. 💡What is an SRM framework? A set of structured strategies and processes intended to enhance supplier performance and build relationships that can deliver a competitive edge. 💡 How do you use it? 1️⃣ Segment suppliers so the right SRM approach can be administered to each supplier. Make use of Kraljic matrix, preferencing, etc. I managed Spices commodity - a market with many suppliers and many customers. The category was largely transactional with the exception of some high profitability SKUs. 2️⃣ Measure supplier performance with defined KPIs and assess regularly to provide actionable feedback. It requires regular upkeep. A client of mine faced supplier performance issues repeatedly across several locations. There were no agreed upon metrics so there was no reliable way to track performance and deliver improvements. A scorecard solved the problem, even if it took months to roll out. 3️⃣ Build relationships through specific strategies based on segmentation. Set up recurring update calls. They are a great way to stay abreast of supplier performance, stakeholder feedback, new business needs, and changing market conditions. I had a bottleneck category with a development supplier. mutual win was to leverage the supplier’s innovation capability while de-risking supplies. So, our meetings would cover supply market risk + NPD discussions. 4️⃣ Assess and mitigate risk Identify risks associated with each supplier, be it financial, supply disruption, sustainability, etc. Risk can be rolled into the performance score card as well. Mitigation plans can include alternate supplier development, or build in contingency plans. 5️⃣ Manage relevant aspects through contracts Usually a part of category strategy development, but deserves special mention when obligations must be contractually defined (for ex., strategic alliances, performance improvement plans, etc.) 6️⃣ Ensure alignment with Procurement and Business goals The ultimate goal of any SRM program is to further overall business objectives. During the COVID years, cost became a second priority to supply assurance across many categories. Many of us tinkered with our strategies to rebalance priorities. Supplier communications became far more frequent to better understand market conditions, waivers were given on key KPIs like On Time In Full, etc. 💡Why do I like it? It is a simple framework which is heavier in execution.. as it rightly should be, given that it takes time to build relationships. 💡What are the pitfalls of this approach? While the approach itself is solid, organizations face challenges due to poor data management coupled with a lack of integrated digital solutions that can seamlessly weave in SRM with day-to-day Procure-to-Pay activities including contract management.

Colombia just turned away two U.S. deportation flights—triggering an immediate 25% tariff. This highlights a critical reality: today's trade landscape is unpredictable. Businesses must rethink their supply chain strategies to balance risk, cost, and resilience. Strategic diversification is key to mitigating vulnerabilities and enhancing flexibility—whether sourcing from Colombia, Mexico, China, or beyond. How to drive strategic diversification effectively: 1. Dual-Sourcing & Multi-Region Models - Diversify critical supply nodes across multiple regions. - Balance cost efficiency with risk management by leveraging free trade agreements (e.g., USMCA, ASEAN). 2. Supplier Collaboration & Development - Build long-term partnerships and develop suppliers in emerging markets. - Ensure quality and compliance while maintaining cost competitiveness. 3. Regional Hubs & Nearshoring - Reduce lead times and logistics costs by producing closer to end markets. - Take advantage of reshoring incentives like the CHIPS Act and IRA. 4. Risk-Based Supplier Segmentation - Prioritize diversification efforts based on strategic importance and risk exposure. - Use frameworks like the Kraljic Matrix to identify critical suppliers. Diversification isn’t about abandoning China or any other region—it’s about creating a more resilient and agile supply chain. How is your organization approaching supply chain diversification in response to shifting trade dynamics?