From the rods of steels, lumber to chequered plate malaysia, every raw material has its risks to the company. When building our own products from scratch we need to ensure the quality of the raw materials we obtain.

In the manufacturing world of goods, raw materials are its backbone. Without good raw materials, there is no good product. If your furniture is of excellent quality and high priced, there is a good chance that the raw materials were expensive. If a product is cheap and easily broken, chances are they were unethically sourced at a cheap price point. 

Currently, world businesses are facing global exposure. In the light of recent global outbreaks and human rights crises, consumers have taken it upon themselves to look at the ethics of the business. Including the ethics that are related to our raw material management. Sourcing different types of raw materials have their own set of risks. The geography, human rights, working conditions, quality, purity, and environmental scope makes a difference to the product demand among consumers. Globals brands and retailers like H&M are now doubling on their efforts to be transparent about raw materials sourcing, working conditions and the environmental impact of their raw materials.

Considering the scrutiny raw materials are under, let’s take a look at all the risks that are pertained to the way we source and the type of materials we get. 

Environmental Risk

Not all raw materials are created equally and naturally. Some of them have devastating implications on our environment, especially if they are sourced unethically. Taking on mass transportation of raw materials have posed dangerous environmental situations like species being endangered, facing extinction, habitats being destroyed, and disrupting the ecosystem. For example, let’s take a look at the world tequila shortage. Many manufacturers and locals of Mexico have highlighted their concerns over tequila shortage which is credited to shortages in the raw material Agave. Mass manufacturing that is done with mass purchases of coal has caused irreversible damage to our ozone layer and contributed to the unbelievable effects of climate change. 

Identity Risk 

The identity of the raw materials as well the identity of the company where you get the raw materials deserve a risk assessment before any further continuation. Getting raw materials is often a long-term business partnership. Switching between suppliers can be costly for the business. But finding the cheapest there is without any identification can cause more damage to the brand in the future. 

The Value You get 

Sometimes we may have overestimated the value we get for the raw materials. People often overlook the target market, demand, and product lifecycle when determining the value of raw materials and how it is supplied. Getting a good deal of raw materials is about having an accurate understanding of how much raw materials you need and how your later innovations can be supported by this relationship with the raw material supplier. Having more than one is smart but it can also be costly for the company.