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Evaluating suppliers - 10 things to look out for

BY Clara Lu 26 Sep, "13

To consistently satisfy customers in any business requires a continuous search for the best suppliers. Whether it is between 2, 3 or even 5 suppliers, it is important that you are able to choose the one with the biggest benefit to your business. These tips will give you an idea of what areas to evaluate and in turn, provide the most value to you.

Here are 10 things to look out for when evaluating suppliers.

1. Good communication with your suppliers.

Knowing from the onset that the supplier is readily available for questions (i.e. Picks up the phone and responds to e-mails quickly), lays a great foundation for a customer-supplier relationship. It should be clear who the main contact person will be, as well as his capability to effectively communicate your needs with his own team. It is also important that should problems arise, you have the ability to speak with senior executives on the team.

2. Competency.

Check out the suppliers’ capabilities against your needs. Most of these service lists are available on their websites or in brochures, but talking to account heads or agents personally will give you an even further look into the true expertise of the supplier. Getting information from other customers similar to you will also be of big help.

3. Capacity.

See if the supplier has the capacity to handle your requirements and how quickly they can deliver to you. How do they handle fluctuations in supply and what are their resources to service all customers?

4. Commitment.

Check their commitment to provide only products of the highest quality. Do they qualify within the standards of Six Sigma or ISO 9001? They should also signify that they are committed to you, as their customer, on a long-term basis.

5. Control.

Inquire about how much control the supplier has over the supply chain, the procedures and the processes. How can they ensure that delivery of goods to your company will remain reliable and consistent?

6. Cash.

A supplier can effectively deliver on clients’ expectations when they have a good state of finances. Ask for proof of the strength of their finances and make sure that they can weather economic uncertainties.

7. Cost.

This pertains to their pricing scheme. More often than not, supplier comparisons depend greatly on this, but be sure to keep in mind that cheap does not always equate to high quality. The pricing is ultimately just one of the factors to consider when choosing suppliers.

8. Consistency.

Can the supplier consistently provide high quality goods? A good basis for this is to ask how long they have been working with their other clients. If they have long standing relationships with other clients, it is a good sign that they can continuously deliver over time.

9. Culture.

As much as company culture is important to your business, it should also manifest in your supplier. Values such as speed, quality, excellence, innovation, and reliability are existent in trustworthy companies and you want to be sure that the same can be said about your own suppliers.

10. Clean.

Are your supplier’s production methods sustainable? Are their processes environment friendly and are they ethical in the way they treat their employees? Are they capable of handling growth and able to expand as your business expands too?
Keep all the information you gather about your suppliers in an easy-to-understand table format, and it should be easy for you to identify the supplier that suits your needs perfectly.

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