Micro Switches are being produced and supplied on a large scale because of its significance in any electrical appliance. Over the past few years, many new players have entered the market and raised the competition among participants. Let’s find out more about this trend.
The advent of more manufacturers in the industry has raised some concerns for procurement managers. In this discussion, we will try to assess the trends of procurement in the micro switch market and we will also highlight some key risks associated with it.
You must have heard about a hike in the prices of micro switches recently. This has primarily happened because of an increase in several costs including wages, storage, logistics, and energy. It has left procurement managers scratching their heads and they now keep changing their buying tactics. Let’s discuss some of them.
Procurers are now preferring to go to those vendors who offer one-stop solutions so that they can have other technological services along with microswitch. Another common strategy which procurement managers are adopting to deal with rising prices is buying in bulk quantity. This helps them save costs for their company and brings down the cost of production.
Another common practice in this regard is engaging with those suppliers who have greater recycling capacity. This reduces their cost and helps them transfer the benefit to buyers.
It is also important for procurement managers to form a strategic alliance with those suppliers who have the global delivery channel available with a global presence. This is very common among procurers these days because it does not cause any hindrance in the delivery or quality all over the globe.
Next, buyers like to affiliate their companies with those suppliers of a micro switch who are research-oriented. Research can help increase the quality of the switch and sustainable performance with reduced cost.
There are many risks associated with the procurement of a micro switch that must be considered and mitigated by buyers. Three major risks are given below:
Consultation must be done with engineers before procuring a micro switch. This will give an idea about what quality and quantity to purchase. This information will also help pick up the right supplier for the order.
Cost buffering is a terminology used by suppliers to get some extra margin when buyers don’t have complete information about the project and micro switch required. So, it is important to know the complete requirements of the order along with the technical aspects of the microswitch.
There are times when orders are not delivered on time or there is some dispute over quality. In such circumstances, terms of business agreed between both parties prevail. Therefore, it is important to go through all covenants of the agreement and it must be drafted in such a way that it is beneficial for both stakeholders.
Putting in a nutshell, increasing demand for micro switches is bringing challenges to procurement managers for which buying tactics are evolving. Some risks must be mitigated in the process.