4 Reasons Why Sourcing for Multiple Factories is Beneficial

Dec 30, 2022 | Best practices

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Dec 30, 20222 min read

Sourcing from multiple factories offers cost savings, improved efficiency, better inventory management, and improved supplier management. FactWise helps organizations increase savings by 25% and efficiency by 20% through comprehensive analytics and decision intelligence tools. Transform your procurement journey with FactWise.

For manufacturers, there are many advantages to sourcing for multiple factories. By leveraging the capabilities of multiple factories, manufacturers can increase efficiency, reduce costs, and improve overall quality assurance. In this article, we’ll explore the benefits of sourcing for multiple factories, so you can make the most out of your manufacturing operations. 

In a case study published by the Harvard Business Review, a multinational consumer goods company was able to improve the quality of its products by sourcing from multiple factories. 

Another example is Apple Inc., which has a vast and diverse supply chain consisting of multiple factories across the world. This allows the company to have increased flexibility and responsiveness to changes in demand and supply, as well as access to new markets and technologies. 

FactWise empowers procurement organizations with a comprehensive range of analytics to enable them to negotiate better and make fact-based decisions. Our decision intelligence tools help teams maximize their cash flow via higher DPO and better payment terms, increase reliance on preferred vendors and also discover new, well-performing, vetted vendors, and leverage automation to minimize the need for tedious, manual Excel-based analysis and data management, phone calls, and emails.  

Here are some benefits of sourcing from multiple factories: 

  • Cost savings: By bundling together requirements across factories, organizations can leverage economies of scale to negotiate better and reduce costs significantly. FactWise enables organizations to increase savings by 25%. 
  • Improved efficiency: RfX management and supplier management are often time-consuming initiatives. By sourcing across factories, procurement organizations can optimize their processes via improved resource allocation. FactWise helps organizations to increase efficiency by up to 20%. 
  • Better management of inventory levels: Bulk orders can be made frequently, distributed across factories instantly to minimize the need for storage and reduce inventory costs, and re-ordered again as per requirements. FactWise enables teams to track orders in real-time and always stay updated on PO/invoiced goods as they travel through goods receival, quality check stages until they are used up in the production line. Teams use FactWise to minimize their DIO (Days Inventory Outstanding) and maximize their DPO (Days Payable Outstanding) to derive the best value from the procurement process. 
  • Better supplier management: By increasing quantities and order frequency and streamlining RfX management via sourcing together for various locations, organizations can improve collaboration and terms with suppliers and their own operational efficiency. With FactWise, organizations can prioritize preferred vendors and also discover new suppliers who are pre-vetted and deliver as per the quality standards and requirements of the organization.  

Companies such as Walmart, a consumer goods company, and Apple Inc., have seen success from diversifying their supply chains and leveraging the advantages that come with it. FactWise is committed to transforming the procurement journey for buyers and suppliers globally. 

About the Author

Stawan is the founder and CEO of FactWise. Before founding FactWise, Stawan was the NA TMT-Procurement Leader at McKinsey. Passionate about procurement, Stawan has 15 years’ experience in enabling clients of all sizes to achieve business impact via procurement.


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