Choosing the right supplier may be one of the hardest decisions a procurement department has to make and 31% of procurers stated this as the hardest part of their job.
The right supplier means that your products and services are delivered on time, that you are receiving the optimal price to meet your needs and that the quality is in compliance with your standards.
On the other hand, making a mistake when choosing a supplier can affect the satisfaction of your deliverables to your customers and the company reputation.
Think Strategically
Know what is it that you need and spend the time to research the offer always keeping in mind how important the supplier is for your business.
The potential supplier should be able to exceed your expectations. Imagine that your business suddenly starts expanding and demand for your services and products are higher. Are your suppliers of choice ready to meet your new challenges?
Think not only what you need in the next few months but long term. If your goal is to provide your customers with faster deliveries in the following year, you should make sure that your supplier is ready and able to meet this need when the time comes.
Do you really have the time to source products and best suppliers or would you rather use your resources to focus on your core activities?
That is where an experienced procurement service company can assist and ease the burden. They are proficient in this field. They are specialists in your industry and already have established relationships with a huge range of suppliers.
How many of the suppliers do you really need?
It is best not to rely on one supplier. What happens if they suddenly go out of business? Or if they become complacent and lower their standards? Who would be responsible for that?
No matter which firms you choose to work with make sure each firm passes your standards of reliability, trustworthiness, efficiency and low cost. Your business should be their highest priority.
An established procurement service company will consider itself as a part of your company and your team.
What to look for in a supplier?
Naturally, your needs from a supplier depend on your industry, type and size of your business. However, regardless of the field you operate in, there are some basic requirements suppliers must fulfill.
Reliability – This is the sole most important obligation of a supplier. You have to get what you need, in the quantity and quality that you need and when you need it.
Quality – The quality of a product or a service needs to be consistent.
Price – Lowest price is not always the most important criteria. You should always search for value and decide on the best balance between price and value.
Clear communication – A good supplier needs to be honest and forthright and let you know of unforeseen delays so you have time to make adjustments.
Customer service - Having a dedicated manager at your disposal that can solve any issue is invaluable.
Financial security – One of the important requirements of every supplier is financial strength and stability so they can meet all your requirements.
Partnership – Approach your supplier as a partner in business. Strong relationships mean that they will always have your best interest in mind and do whatever is in their power to provide you with what you need.
How to ensure good results?
Monitoring the supplier performance is necessary. Establish a direct contact point with your company and conduct regular performance reviews which will be of great help when it’s time to renew the contract.
Bonus Tip
Examine Supplier Diversity programs, which encourage the use of minority-owned, women owned and veteran owned small business as suppliers. This directly enhances supply chain diversification. Trying to succeed as a small business with intense market competition makes them extra dedicated and enthusiastic about delivering the optimized results to the company they are partnering with.
