Effective sourcing in Eastern Europe: strategies and recommendations

Sourcing in Eastern Europe represents a strategic opportunity for companies looking to optimise their costs while maintaining a high level of production quality. Cédric Fromont, Associate Director of Valians International and sourcing expert in Eastern Europe, shares his advice on how to succeed in this region.

The reasons for sourcing in Eastern Europe

Sourcing in Eastern Europe helps to secure the supply chain. Many companies are looking to secure their supply chain, which is often over-dependent on Asian suppliers. By diversifying their sources of supply in Eastern Europe, they can reduce the risks associated with over-dependence on a single market. Diversifying their sources of supply by relying on suppliers in Eastern Europe also enables companies to be closer to their customers and reduce their carbon footprint. It also enables them to react more quickly to market fluctuations and consumer demand.

Sourcing: the keys to success in Eastern Europe

Eastern Europe: understanding the region

Eastern Europe offers an interesting compromise between distant sourcing in Asia, which offers low costs, and sourcing in Western Europe, which is more expensive but has a higher level of maturity. This region gives us access to local suppliers, offering good responsiveness and competitive prices.

Definition of supplier selection criteria in Eastern Europe

It is crucial to clearly define the criteria for selecting suppliers. This includes logistical aspects, labour costs, production costs, as well as more subtle criteria (soft skills) which can vary from one country to another. A clear definition of the criteria helps to filter candidates effectively. Depending on the size of the company, the challenges and needs in terms of sourcing vary. A small or medium-sized enterprise (SME) often needs to find a supplier quickly and efficiently. In this case, countries such as Poland, the Czech Republic, Slovakia and Hungary are recommended. These countries offer a more attractive solution in terms of responsiveness and operationality. For large companies with a well-structured supply chain and purchasing department , countries such as Romania, Bulgaria, Serbia and Ukraine can offer more attractive solutions in terms of direct costs.^[1]

Building long-term relationships with suppliers

Effective sourcing requires a long-term commitment. This means carefully identifying suppliers and supporting them. It is important to coach and mentor suppliers, who may not be used to this type of relationship.

How do you identify your suppliers in Eastern Europe?

To effectively identify potential suppliers in Eastern Europe who are suited to your company’s specific needs, you need to carry out these five steps:

1. Selecting product families: start by selecting the product families you want to source in the region. This allows you to concentrate your efforts on the products that are most relevant to your business.
2. Identifying contacts: given that there are few major trade fairs in the region and that companies don’t promote themselves much in various media, it is essential to use local contacts such as associations, clusters, export groups, catalogues and trade fairs to draw up a list of potential suppliers.
3. Filtering and qualifying potential suppliers: having identified an initial list of potential targets, it is important to validate key criteria such as product range, certifications and other elements essential to your business. This includes using requests for information (RFI) and requests for quotations (RFQ) to qualify suppliers.
4. Visits and audits: site visits and audits are organised to qualify the selected suppliers. The aim is to ensure that the candidates selected meet your company’s specific requirements.
5. Long-term commitment: effective sourcing requires long-term commitment. It is crucial to coach and mentor suppliers, as they may not be used to this type of relationship. This means committing to the process of identifying and monitoring suppliers.

Valians International’s support for successful development in Eastern Europe

Sourcing in Eastern Europe can offer significant benefits for companies, provided they follow good practice and engage in a considered process. The expertise of a partner like Valians International can make all the difference in identifying and selecting the right suppliers in the region, and ensuring the success of your sourcing project.

Valians International, an expert in development in Eastern Europe, also assists companies in :

• Export projects: supporting companies in their efforts to export to new markets.
• Sourcing projects: Help in identifying and selecting suppliers in the region.
• Set-up projects: assistance for companies wishing to establish a physical presence in new markets, taking account of specific local features.

^[1] Beyond sourcing, these countries are also dynamic markets representing opportunities to expand your business in Europe. Find advice on how to successfully develop your business in Poland in our previous article “Poland, how to develop your business in a buoyant market”.