How to Source a Chemical Raw Material
Read time: 4-5 minutes
In this article, we are going to look at the steps involved with finding a chemical we’ve not sourced before.
This is something crucial for businesses in various industries, and having the right frameworks in place not only ensures efficiency, but also gets you the right quality at the right price.
Many people struggle with sourcing raw materials because they might not know where to start, what to look for, or how to negotiate the best deals. Sometimes, they might even choose the wrong suppliers, leading to poor quality materials or overpaying.
My framework is as follows:
Define Your Needs
Conduct Regulatory Assessment
Identify and Evaluate Suppliers
Ensure Quality and Compliance
Negotiate Pricing and Terms
Build Supplier Relationships
"If you can't describe what you are doing as a process, you don't know what you're doing." – Edward Deming
Below is an overview of the steps I take when sourcing chemicals. I’ve realised there is a lot more nuance to each step. So, I intend to expand on these steps in future editions of the newsletter.
Define Your Needs
It may sound obvious, but you need to precisely identify what you need. The grade, the volumes, the packaging, any special requirements such as eco-friendliness, specific certifications and/or statements (vegan, halal, phthalate-free, allergen free) and so on.
Conduct Regulatory Assessment
It’s vital to understand the regulatory environment surrounding the chemical you need. This includes compliance with safety standards, environmental regulations, and legal requirements specific to your industry and region.
I would also encourage you to seek advice from local, reputable, experts. Do not just trust the word of a supplier from the outset. That isn’t to say they are deliberately misleading you, but every industry, every country, may have completely different regulations.
Identify and Evaluate Suppliers
I have always been a firm believer that, when I am purchasing form overseas, I use a local distributor, agent, partner to help. They have in-depth local knowledge, connections, and (most importantly) I trust them. Having spent a good amount of time in the industry, I now have many of these connections globally.
But where to start if you don’t.
Well (and keeping your specific needs in mind always), exhibitions in your industry are a good place to start. Who is exhibiting and what are they doing there. (A lot of this information can be gained from simply looking at the exhibitor list). Meet with them and get a feel for their business and their knowledge. If you work in a particular industry, it’s a lot easier for you to work out if this partner is going to be a good fit for you or not.
If it’s an existing product, who are the key players? Can you leverage a google search, industry journals or publications, maybe you could check import data?
Finally, and rather biased of course, leverage distribution companies. Remember, their whole business is predicated on the successful sourcing and supply of chemicals.
Ensure Quality and Compliance
This is, of course, paramount. You need to verify that suppliers meet all quality standards and comply with regulations (or be prepared to handle those yourself).
Initially vet a specification or example certificate of analyses. Next, request samples if you have the capability to test them yourself, or have material tested with a third-party lab. If this is a raw material of significant importance, perhaps schedule a site audit, or have a trusted partner in the region conduct one on your behalf.
If you are happy with everything thus far. You can then progress up to trial orders, before moving to larger ones.
As a side point, I would recommend always trying to have at least two sources for each raw material for security of supply.
Negotiate Prices and Terms
Okay, so we have found a supplier, and we are happy with their product. Now we need to negotiate the terms of business.
Be clear about delivery schedules, mode of transport, incoterms, payment terms, and general expectations. Effective negotiation is all about openness and a willingness to work collaboratively.
Build Supplier Relationships
if you have followed me for a while, you’ll have read this more than once. If you are happy with everything, then build strong, long-term sustainable partnerships with your suppliers.
This can lead to improved service, reliability, and perhaps favourable terms in the future. These relationships are based on mutual respect, consistent communication, reliability, and trust.
If you have 1 supplier of a product for 100 customers, I know which relationship is more important…
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Hopefully, this has given you some insights into how I go about sourcing materials, or perhaps a spark to help refine your own process.
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Thanks for reading, and see you next week.
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