How do you go about vetting and selecting new sources of supply?
Today’s post is from our archives at SafeSourcing.
In brief, here are few steps to selecting the proper suppliers in order to provide the best goods or services at the best prices and in the right time frame and location for your specific business needs. This process is broken down to a few select categories to assist you in doing so. While there are certainly others, this will get you off to a good start.
Price – A key consideration for choosing suppliers is affordability. Competitively priced suppliers are usually the most attractive option. Affordability does not always represent the best value for money. If the quality of your supplier’s product is subpar, you may incur additional costs for returns and replacements, and risk losing business. If you decide to pass poor quality on to your customers, you risk damaging your business reputation.
Reliability – Reliable suppliers deliver the right goods or services on time. Large suppliers are generally more reliable because they have enough resources and systems in place to make sure they can still deliver if the unplanned happens, which it usually does.
Stability – You will want experienced suppliers with a proven track record. Stability is important, especially if you are entering into a long-term contract with a supplier or they are the only supplier of a particular item critical to your business.
Location – Consider location when selecting suppliers. Dealing with distant suppliers might mean longer delivery times and extra freight costs. When lead time is the most critical, a local supplier might be a better option. I recommend investigating freight policies of distant suppliers. Bulk orders, for instance, might get you free shipping or you might be able to combine different orders to reduce costs.
In addition, your might also want to consider financial strength, existing user references, specific industry certifications and programs that support your companies social responsibility initiatives.
SafeSourcing would like to assist you with your supplier selection process. Our SafeSourceIt™ Global Supplier Database already contains much of this information. In order to learn more as to how we can help you with your specific procurement needs or about our “Risk Free” trial program, please contact a SafeSourcing Customer Service Representative. We have an entire customer services team waiting to assist you today.