Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing. Mark asks "How much do you know about your suppliers and have you ever visited them?"
One of the important practices recognized by many successful procurement professionals is that of performing onsite visits to both their new and incumbent suppliers. So much can be learned about how your suppliers do business that may affect your future decisions and contracts.
Today’s blog will be focusing on visits to domestic suppliers and Part II will have more details on visiting your international suppliers.
If you are dealing with a new supplier and scheduling an onsite visit, this is the opportunity for you to validate all of the details they have presented in their RFP/RFI response or presentation; validating that they have the staff, resources and facilities to handle the demand you are requiring of them.
This will be an opportunity to meet the sales and support team that will be assisting you and your company when the inevitable problem does occur, so take advantage of this time to get acquainted with the supplier’s staff.
If you are dealing with an incumbent supplier, make sure you have thoroughly reviewed your existing contract so that details about the level of service and quality promised can be focused on as part of the visit. Make sure that you request, in advance, any additional reporting from your IT department or from the supplier on the history of the relationship so far. This would include quality issues, shipping issues, product delays, inventory availability or any other special circumstance that may have occurred. This visit will be the right time for you discuss these with the supplier face-to-face.
A final very important area to spend time in your visit, whether new or existing supplier, is the shipping area. Here you will have a very clear idea of how the supplier is organized and you may even get a glimpse at the companies they get their raw materials from as well as other customers they are shipping too for future reference and follow-up. Information found in this area will also go a long way when having contract negotiations with your incumbent suppliers for concessions on how your products and deliveries are handled.
Onsite visits are critical to understanding who you suppliers are and can be extremely valuable negotiation checkpoints. My next blog will focus on the differences and things to consider when visiting international suppliers.
We look forward to and appreciate your comments.