A question we often hear from retailers, is how many suppliers do you have in your supplier database?
Todays post is by Ronald D. Southard, CEO at SafeSourcing Inc.
We sometimes want to blurt out a response that is number oriented because ours is the largest and most diverse retail supplier database. However we end up holding back in order to better understand the question that is really being asked. The discussion normally evolves along the line of quality and what data we have available in the database in order to make high quality supplier selections. Although reduction in cost may in fact be the ultimate goal, it in fact may not be the end point after the necessary due diligence required to pick the right supplier or suppliers.
Developing a plan that addresses the often conflicting objectives during your decision-making process and identifying the optimal list of suppliers requires significant amount of data in order to mitigate long term risk. Measuring your supply chain partners on cost only may cause you to miss many of the non-financial aspects that are so important such as:
1. Customer references 2. Product quality 3. Flexibility 4. Terms 5. Funds 6. Distribution 7. Responsiveness 8. Safety Focus 9. Eco Focus 10. Collaboration practices 11. Aggregated category opportunities 12. Experience
The risk of a new supplier performing poorly can negate any savings gained from direct product cost reductions. Driving sustainability in supplier improvement is one key to minimizing these potential risks within your company’s supplier base. Contact us at SafeSourcing if you like to explore expanding your view of the supplier universe
How your e-procurement solutions provider addresses these questions is also key.
We look forward to and appreciate your comments.