Steer your supplier base, don't just file it

Rule of thumb: at least two active suppliers per critical material class (avoid single-source), at most three to five per material to bundle volume meaningfully. More than that fragments negotiation power. In practice: a mid-market company with corrugated, folding cartons, film and labels demand realistically has 8–15 active packaging suppliers.

Three steps: (1) take stock — who supplies what, with what volume and performance. (2) classify — strategic, operational, one-off suppliers. (3) consolidate — strategic suppliers get more volume for better terms, one-offs get bundled for re-tender. PAXLY makes step one a data exercise on the platform instead of an Excel hunt.

Single-source risk means only one supplier is active for a given material class — if it fails (insolvency, fire, strike, capacity squeeze), packaging supply stops. To detect: count active suppliers per material class. PAXLY shows this per class as a stat tile and flags critical situations automatically.

Three main dimensions: on-time-on-quantity, quality (% complaints, defect rates), price (index gap to market). PAXLY computes a performance score updated continuously from order data, complaints and price moves — supplier scoring becomes operational, not an annual review meeting.

Master data and contacts, contracts with versioning, certificates with expiry alerts (FSC, ISO 9001, BRC, PPWR-relevant proof), price lists and index clauses, delivery and complaint history. All structured and audit-proof.

A switch is worth it when three preconditions align: (1) price sits demonstrably above market (the index shows 7%+ deviation). (2) The incumbent supplier has no clear performance argument (on-time delivery, quality, certifications) versus alternatives in a structured comparison. (3) Switching costs (tooling, sample testing, onboarding) amortize within 12–18 months. Structured supplier management is the prerequisite: you see current performance, know contract terms and notice periods, have last-time tender specs at hand — re-tendering runs structured and fast because the master data is already in place.

Two consolidation levels: (1) data — all suppliers, contracts, price lists, certificates in one source (PAXLY platform instead of ten Excel sheets per site). (2) Organizational — sites or subsidiaries pool demand, tender together, share framework contracts. Data centralization is the prerequisite — without it, organizational pooling is just another spreadsheet. Typical effects: 8–15% better terms through volume aggregation, plus a 30–50% reduction in supplier count.

Neither blanket answer works — the choice depends on the material and risk profile. Single-source makes sense for tightly specified specialty materials with small volumes, where tooling or qualification makes switching expensive. Multi-source (at least two active suppliers) is essential for critical high-volume materials like corrugated or film — if the only supplier fails, production stops. PAXLY flags single-source clusters automatically and shows second-source candidates from the market base.