How to pick the right supplier for your business

In regards to the vast world of supply chain management, many things come into play: procurement, for instance, is one of those key areas within the whole operation of a business’s supply chain management. David Kiger has previously pointed out the importance of getting to know in detail every single component of a company’s supply chain, and in this sense, coming up with a supplier selection process is definitely a good idea, for selecting the right supplier demands way much more than simply going through price lists.

Of course, the choice is way more complex, as it depends on a sheer array of factors that include different aspects such as money, quality, responsiveness, reliability and, above all, pre and post service. How does a business weigh up the aforementioned aspects? Well, it entirely depends on their priorities and, most importantly, the kind of strategy they want to implement, in the case of a startup, for instance, or are implementing, in the case of well-established businesses.

Nonetheless, irrespective of both the strategy and the business’s priorities, companies can develop a strategic approach to selecting suppliers:

Think strategically

Basically, logic dictates that the most suitable suppliers are those who offer both products and services above expectations: those that not only meet but also exceed the needs of a particular business. Everytime companies set out to look for proper supplier, it is quite a good idea to determine what does the business really need prior to recklessly partnering with the wrong guys. Determining what the company desires to achieve is key, whether it is the reducing idle times, delivery times, etc. Regardless of the scenario, these goals will play a major role in the selection of the supplier, and companies, especially supply chain managers, must ponder whether such supplier has a direct effect not only on the variable they want to improve but also on the price.

Thus, it is quite advisable to first assess how many suppliers does a company need. In fact, selecting a few, and purchasing from them, has proven to yield a number of advantages:

  • They are much easier to control
  • The company will be important for them
  • The possibilities of reaching beneficial deals are high and so are the possibilities of receiving a competitive advantage.

Be that as it may, the important thing here is to come up with a solid and reliable choice of different sources: purchasing from only one supplier entails a much higher risk. What if it fails? What about production, customer satisfaction, sales? The possible outcome is no less than daunting.

What key aspects should companies look for in a supplier?

In short, there is a fistful of aspects companies should look for when setting out to look for suppliers:

Reliability: deciding to work with untrustworthy suppliers is highly risky. In fact, if the supplier does not meet the company’s expectations, then the company is open to falling victim of letting its customers down. And that, of course, is something they cannot afford.

Quality: As important as the aforementioned aspect, finding top-quality suppliers is key: they need to meet the company’s quality standards since, ultimately, consumers always associate quality with the company they are buying from, not its suppliers.

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Image courtesy of Pixabay at Pexels.com

Value: Many supply chain managers and procurement executives are tasked with reducing the overall overhead or the costs associated with their processes. Thus, it is quite common to see both types of individuals looking for much cheaper options when it comes to suppliers. The lowest price, however, is not always the best option nor the safest choice when it comes to cutting out costs. As mentioned above, reliability and quality are top-priority, which raises the question: how much are companies willing to pay to ensure both aspects, thusly matching their expectations and demands?

Post service: Suppliers are always expected to deliver on time high-quality materials. But if things were to go sideways, it is also expected from them to act accordingly and tell their clients, the companies they work with, that they will not be able to proceed with a particular order. Good suppliers are the ones that are willing to talk to their clients on a regular basis to realize whether there is something that can be improved or what aspects have been compromising the operations if that were the case.

Think of them as partners: Establishing a solid relationship with suppliers will end up benefiting both parties: companies want their suppliers to realize how important the business is to them, so they strive to provide the best possible quality service. In this context, and vice versa, aiming at developing a mutually beneficial long-term oriented relationship with suppliers is key, and, in fact, it tends to lead to competitive advantages—which, under today’s juncture, mark the difference between success and failure.

* Featured Image courtesy of Pixabay at Pexels.com

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