Choosing the right supplier
For you to offer high quality products or services, choosing the right supplier is a key step in your supply chain management. Smart choices will allow the process to flow smoothly and ensure that your customers get what they want, when they want it.
Before you can assess any potential suppliers, it is a good idea to fine-tune your requirements. Optimal suppliers should be able to tailor their offerings to your needs — not the other way around.
The lowest price may seem attractive, but quality, service, reliability and delivery time are also important factors. Your goal is to do business with commercially viable suppliers. If their prices are too low, they might not be around long enough to serve you.
It makes sense to cultivate more than one supplier relationship and build a reliable network, so that you do not run into problems if one of them has a setback. You may draw on a variety of sources to build your base:
- Personal recommendations from your contacts
- Supplier directories and government databases
- Industry associations and publications
- Chambers of commerce and other networking groups
- Trade fairs
The time and effort you put into the search is an investment towards developing fruitful professional relationships that can pay off for your business. You may wish to consider the following steps when starting the process:
- Make a shortlist based on your research.
- Interview potential suppliers; compare what they have to offer.
- See their businesses in action; do not hesitate to ask questions.
- Negotiate terms to draw up a contract.
- Develop relationships and review performances periodically.
Here are some questions that might help with your choices:
- Do your potential suppliers understand your industry and your customers?
- Do they use subcontractors? If so, you may want to investigate them as well.
- Are their values in line with yours? Are their practices ethical and/or eco-friendly?
Once you choose your suppliers, the next step is the on-going process of relationship building. You never know when you may need to rely on them to help out under unusual circumstances.
For more resources, check out our section on Finding and managing suppliers.