When selecting your suppliers, it is essential it is essential all your requirements are considered during supplier selection and not just cost. What initially looks like the best cost, can end up being an expensive choice further down the road if price is the only factor considered.
Important Factors in Supplier Selection
There are many factors that can be considered in the supplier selection process, but it need to be based on what is most important for your business. For example, if short reaction times on customer requests are important, lead time is one of the factors to consider when selecting suppliers.
A range of factors are listed below, but the requirement and priority of them will vary from business to business.
- Lead Time
- Customer Base
- Financial Health
- Social Responsibility
- Product Development
Other items to consider is the amount of suppliers that is required, a small amount of suppliers might be easier to control and provide a better deal due to the higher spend. But on the other hand, if you are relying on one supplier for a critical part,
Finding Potential Suppliers
There are several sources available to identify potential suppliers, using several sources gives a larger amount to select from. Some examples are given below.
- Past Experience: Are you currently using the supplier for another product, or is it a supplier that has been used in the past.
- Business Directories: There are a lot of online business directories where it is possible to search for local suppliers.
- Exhibitions: It can be suppliers during industry specific exhibitions.
- Recommendations: It can be a supplier one of your business partners or friends have recommended.
Selecting the Supplier
After you have created the list of potential suppliers, shorten the list down to 4-5 suppliers that meet your needs.
Next step is to request a written quote from each supplier on your shortlist, by providing them a clear brief of what you need. Once the quotation is received, compare them on the factors most important to your business.
If possible visit the supplier and meet them face to face, that way you get a much better understanding of how the supplier work and benefit your business.
Once you have made the choice, negotiate the terms and draw up a contract.
If you would like to know more about supplier selection or interested in support with new quality initiatives, feel free to contact us for a free consultation.
Alternatively, you can continue to our quality training page to see our available courses.Go to Quality Training