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How to manage suppliers.

The selection and management of suppliers is an important part of maintaining quality of the product or service you provide. No single company is able to deliver their service or product without suppliers. A company cannot simply produce everything that is needed; therefore managing suppliers is crucial to success. That is also why it has such an important position within a lot of the international standards such as ISO9001. The most important suppliers are of course the critical suppliers. It is vital to manage these suppliers rigorously because the quality of your product/service is dependent on it.

Selecting Suppliers

The first thing in selecting trusted suppliers is having clear and measurable selection criteria. Create a list of criteria the supplier needs to fulfill before even considering the company as a supplier. Some criteria can be:

  • Quality of product/service
    • Are there clear quality checks
  • Skilled personnel
    • Check the employees
  • Time management
    • How is the delivery time
    • Do they come up with acceptable timeframes and stick to them
  • Communication
    • Do they communicate when something is off
    • Is there a clear way of communication

These criteria can be checked via an audit or a pilot purchase. It is important to carry out some tests before making the supplier a critical supplier. The trial purchase can give a good feeling of the quality of the supplier. During the selection process try to avoid the five most common mistakes.

Managing Suppliers

When the supplier has been selected it is important to have a clear method to track your critical supplier. Define KPI’s, track them on a fixed time frame and make sure the supplier gets insight in them. Some KPI’s can be:

  • On time delivery
  • Failure of incoming quality checks
  • Failure of on time communication in case of delay

Of course there can be a lot of different KPI’s but just create 2 or 3 and manage them. An overload of KPI’s will only make it more confusing. These KPI’s can be easily changed. Online quality management systems make it very easy to keep track of these KPI’s.

Good luck managing your suppliers!

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