When looking for new suppliers for your business, you should look to form business relationships with suppliers who will serve their purpose best for the interests of your business. This explains why supplier selection process should be a very crucial activity to a business. Suppliers determine how your business will run and hence efficient and effective suppliers who deliver at the right time, at the right place, in the right quantities, the best quality and at a reasonable cost are the kind of suppliers you should be keen on establishing relationships with. Whether it is a small business or an entire firm, good suppliers are the key element in the success of your business. The following tips and rigorous criteria will enable you to pick out the suppliers that will suit your business best.
Analyze the managerial competencies
You should analyze the organization structure of the supplier you wish to work with. The management policies, qualities and core values will tell you what kind of an organization it is The overall corporate structure should also be looked at analytically to determine if that firm will be reliable and able to meet the terms of your contract to supply your business. This will also show their performance and capabilities in handling supply business.
Look at the financial capability
When looking for an efficient supplier, you should consider the financial status and credit worthiness of the identified suppliers. Financial stability is important since if a company is not financially stable, then they will not be able to deliver on your requirements on time. The aspect of financial resources should be looked at on the basis of the firm’s invested capital to determine its capability to supply progressively without any delays due to financial hiccups.
The supplier should prove to be reliable. To assess the reliability of a supplier, consider analyzing the previous transactions the supplier has had with other businesses. Were they able to always deliver on time? Were their delivery or completion dates reliable? These are the questions you should be asking while assessing the capabilities of a supplier. This criteria should translate into the efficacy in performance of the supplier.
Availability for business
A supplier should prove to be available for business at any time when needed. In order to analyze the availability of a supplier, you have to assess their responsiveness to dynamic business environments. You should seek to establish relationships with suppliers who always respond to your calls promptly without delays. This will ensure that the supplier will never fail your business operations due to delays.
Compare potential suppliers’ price levels
While price is not solely important, it is good to compare the price and negotiability levels of different suppliers. The reason for being in business is for the purpose of making or maximizing profit gains. Therefore, you should always strive to cut the best deals in terms of price and quality for your business. The terms and conditions of a supplier should be negotiable to a point of agreement. This will set the ground rules for the working relationships between your business and the potential suppliers identified.
The key to finding a good supplier is not only through assessments on their core competencies and capabilities. You should make sure to ask around and do your research adequately on the background of the identified potential suppliers. Another thing to consider, especially if you are operating a big firm, always find and work with suppliers who conform to the government regulations and requirements. A good supplier should be on approved lists of trade associations and government records.