B2B Sourcing: What is it and How to Stay Competitive in 2023

Selecting a supplier for your company’s products is kind of like matchmaking. You’ve got a list of qualities you’re looking for and the options are endless. You want someone who is reliable, punctual, honest, easy to work with, and flexible. So, how do you choose? In supply chain management, this essential selection process of working with the right supplier to provide the product your company needs is called B2B sourcing. It’s the first step in the supply chain process and can make or break your business if not done carefully and with the right data to make decisions. But, it doesn’t have to be difficult to find your perfect match. There are technology tools available, like supply chain management software, that make the process of selecting a supplier easy and painless.

What is B2B Sourcing?

Businesses today have greater access to global suppliers than ever before through advances in technology. B2B sourcing involves the process of vetting, selecting, and managing suppliers who can provide the products an organization needs to run its business. Sourcing involves activities like research, creating and executing strategy, establishing quality and quantity metrics, and choosing suppliers that meet these requirements. Sourcing is essential to maintaining optimal supply chain operations and guarantees the company will have access to the products it needs to meet its goals.

What is Digital Design in Retail?

Digital design in the retail industry encompasses the software and processes that bring drawings to life. Fashion designers especially are accustomed to computer-aided drawing (CAD) software that allows users to create 2D and 3D sketches, illustrations, and tech packs to simplify communicating design ideas across the supply chain for constructing the product.  
There are many advantages to digital design, including decreased speed to market, the ability to easily divide product designs based on seasons, faster response to trends, and better portfolio resiliency. Plus, the ability for suppliers to share a design almost instantaneously after it is created moves designs forward within weeks instead of months. Product lifecycle management (PLM) software takes digital design a step further, providing control at every stage of product development and allowing full transparency of related data for all key stakeholders.

What is the difference between B2B Sourcing and B2B Procurement?

Sourcing and procurement can seem similar because they work hand in hand. But they each have a distinct place in the supply chain process:

• Sourcing is the process of vetting suppliers, building supplier relations, and maintaining a supply chain of vendors who provide the products to meet the organization’s needs.
• Procurement is the process of acquiring the supplies necessary for the business’ operations.

Essentially, sourcing paves the way for procurement. Once sourcing has identified a team of great suppliers, procurement will get to work with various activities such as: 

• Selecting specific products
• Placing an order
• Receiving and paying for the order
• Completing all the documentation required for each order
• Maintaining supplier agreements for reach order
• Ensuring quality and standards that have been agreed upon (delivery times, packaging, damages, returns). 

Procurement involves the nitty-gritty details that are involved with each interaction a company has with its suppliers to obtain products or materials. But as the business grows and more products are sold, the procurement process can become much more complex.

Understanding the Modern B2B Sourcing Process

Companies that are looking to maintain a competitive edge in the changing retail landscape are investing in technology to modernize the sourcing process. With increased demand from customers to receive the best quality product at the lowest price, as well as their ability to get the product from multiple channels (online, in-store, app), retailers have no choice but to adapt to this new way of business. Supply chain management software offers companies the ability to access a wider variety of suppliers in order to provide decreased product costs and achieve greater supply chain efficiencies. 

How to Stay Competitive with B2B Sourcing in 2023

Now that we’ve outlined what B2B sourcing is, there are a variety of ways to stay competitive through your sourcing efforts in 2023. Here are five simple steps your organization can take today to stay ahead of the game.

Step 1: Utilize supply chain management software to source from a broader network of global suppliers. 

Gone are the days of telephone-based supplier interviews and hours spent searching for potential suppliers online. You can now search for suppliers in an online marketplace based on specific criteria. This technology gives you the ability to do sufficient research by easily examining supplier profiles and rankings, reading supplier reviews, and asking questions — all with the click of a button. You now have access to thousands of potential suppliers in seconds who are ready and willing to have your business. And suppliers now have access to a wider pool of buyers — without having to spend the extra marketing money. It’s a win-win for both buyers and suppliers.

Step 2: Maintain competitive pricing by accessing a wider variety of suppliers.

With access to a much wider variety of suppliers, you have the ability to easily compare prices among suppliers to get the best possible deal. And it doesn’t mean you have to sacrifice quality for cost. Some suppliers are able to offer better pricing simply because they are geographically closer to a delivery hub, making shipping costs cheaper. Whatever the case, it allows you to find the right balance between quality and cost so you can achieve the greatest return on your overall investment.

Step 3: Get products on the market sooner with digital design tools. 

Supply chain management software offers the unique ability to communicate almost instantaneously with product designers across the globe. Whether it’s reviewing designs and approving them or checking to see the amount of inventory in stock, your supply chain can move much faster. If a new trend pops up, your organization can respond quickly through the platform and request new designs that can be moved from concept to reality in weeks instead of months. This process improvement allows you to get your products in the hands of your customers sooner than ever before. 

Step 4: Select suppliers who can help you think (and deliver) products outside the box. 

Sustainability. Carbon footprint. Fair trade. These are growing topics of concern for many customers in today’s changing retail landscape — and they’re making their buying decisions because of them. Thus, retailers are looking for suppliers who can help them deliver products with this promise — and those who can offer these products to their customers can have a major competitive advantage. 

This demonstrates the importance of being proactive in your sourcing, rather than reactive. With suppliers’ increasing transparency of how their products are made and where they come from, retailers can pass along this information to customers who purchase with purpose. With access to a wider supplier network, you can now select suppliers who are more eco-conscious and can help you deliver these types of products. With a supply chain management system, you can easily search for suppliers who meet your criteria and ensure you’re getting the best possible price at the same time. 

Step 5: Better manage spending and supplier compliance. 

With built-in analytics capabilities, you can have more visibility into what’s happening across the entire supply chain to better manage spending and compliance. Compliance is one of the most complex and expensive supply chain processes. With the ability to house a digital record of all certifications and ratings for your supplier, you can minimize risk from day one.

Additionally, you can give a score to suppliers, factories, and mills on compliance, sustainability, and execution for factory assignments. This helps you and your team members remember the relationship nuances for any future projects that come up. You can also build transparency with your stakeholders by pulling supplier reports from one source. 

To know that all of your supplier information is organized in one place is invaluable to any organization and can cut down significantly on time and costs spent on managing suppliers. The final result is an ethical and transparent supply chain that can be made visible to customers at any time — and who wouldn’t want to do business with a company like that?

Conclusion 

Selecting the right software to manage your sourcing is an important decision that can’t wait in today’s competitive market. Suuchi’s next-generation software accomplishes everything you need it to — from a single interface. The Suuchi GRID connects all of your supply chain processes from product development and sourcing to production and distribution, ultimately increasing your visibility, lowering costs, and reducing time-to-market. The GRID’s Global Sourcing (GSN) module also allows companies to take a digital approach to sourcing with hundreds of suppliers across that specialize in a number of categories.

Request a demo today, and learn more how Suuchi can help your organization improve your sourcing strategy from day one.