In numerous posts, we touched upon how to manage suppliers and what is essential in this process. However, before you manage them, you first need to select them and have some kind of process for this. Of course, the selection criteria aren’t universal for every organization, but there are some common best practices that you can apply.
Before you start selecting suppliers, it is important to define what they have to deliver. When you know the exact scope, you can select suppliers that can deliver this particular product or service. It’s also good to define if it will be a one-off purchase or more of a longer-term partnership. When it is just a one-off, it isn’t really worthwhile to have a complete vetting process for the supplier because that is pretty labor-intensive. In the case of a longer partner, clearer selection criteria and supplier management criteria are key. Having a supplier selection process will help to streamline this process.
When it comes to selecting a supplier, every company has its own criteria. However, we do see some common criteria used pretty regularly.
Selecting a vendor that can deliver in time sounds like a no brainer and might be hard to assess before working with them. However, a limited background check with some other customers of the vendor makes this pretty easy to do. You simply call a couple of customers to get a real feeling about this.
The quality of the delivered product or service is, of course, very important. When maintaining your own level of quality, it’s critical that suppliers are able to provide the same level of quality. You can check this by buying some products or simply by performing a supplier audit.
If you regularly purchase products from the supplier, you want these products to be available when you need them. Of course, this highly depends on the delivery time of the products and your own timeline, but aligning these expectations through the supply chain is a necessity to prevent difficult situations.
The flexibility of the supplier is very important, especially when you have lots of ad hoc demands from your customers. When the supplier is able to work along with you in these hectic situations, you’ll be able to meet the demand from your customers. These are just a few of the criteria you can use. It is vital you define the criteria that are important for your organization.
When the criteria are defined, and the process has been agreed upon, automating this process will take away lots of mundane and repetitive tasks. This automation can easily be accomplished by defining a proper workflow with required verification steps. Every step of the described process can be defined in the workflow, and the responsible person(s) can be notified when they need to add information. Also, the management of the suppliers will become much easier with the right notifications. A great example of this is notifications on when the certification of the supplier expires.