Search and selection of suppliers

2 November 2009 - 17:46

The suppliers whereupon count a company will determine the success of this one to a great extent. To count on good suppliers not only means to count on quality consumptions (and, therefore, to be able to offer quality products), but also means to be able to maintain low costs, or the security to know that we can be supplied products we require whenever it.

Reason why whenever we must choose to our suppliers, we must take our time, and look for and select these well.

The first passage in the search and selection of suppliers is to look for all the possible suppliers on which we could count, to obtain all the data necessary of these, to evaluate them according to certain criteria and, finally, to select to the supplier or the most advisable suppliers for the company.

We see in detail each one of the steps that conform the process search and selection of suppliers:

1.

The process of the search and selection of suppliers begins with the search of the suppliers that offer the consumptions, products or services that we are going to require.

For the search of suppliers we can go to diverse sources, some of these are:

• Known: people who us can recommend suppliers, or they know because them when being or to have been in businesses similar to ours, or for any other reason.
• Workers of the company: workers who probably know suppliers with which they have worked previously in his old uses.
• Competition: competing companies to which we can investigate for knowing which are their suppliers.
• Newspapers, specialized magazines and publications: means where several companies suppliers usually publish their announcements.
• Internet: classified, directory finders, announcements, forums, enterprise Chambers of Commerce, associations, etc.
• Yellow pages.
• Specialized fairs or exhibitions.

When realizing the search of suppliers, we can make a preselection where we discard the suppliers that do not fulfill basic requirements such as the quality in the product, or which they exceed the maximum price that we are arranged to pay, so that we pruned to make a list of suppliers that is not so extensive.

2. To determine selection criteria

In this step, we come to determine the selection criteria that we are going to consider at the time of evaluating the possible suppliers and soon to select the indicated one.

Some of the main criteria of selection that we can take into account are:

• Price: the price of its products, the expenses that could be added to this one, the discounts that could grant to us.
• Quality: the quality of the consumptions, products or services that offer.
• Term of the payment: the conditions of payment that offer us, if ask to pay to us cash, or give facilities to pay us to the credit.
• Downtimes: the time that passes since we make the order until they give it to us.
• Guarantees: the guarantees that grant and the period of duration of these.
• Reputation: prestige and the good references that it has.

More criteria of selection we can find in the article: criteria of selection of suppliers.

3. Obtaining of information of the suppliers

Once we have made our list of suppliers, and determined the selection criteria that we are going to use, we happened to successfully obtain the necessary information of each supplier, that it allows us to evaluate them according to the established criteria.

Besides means through what we arrived that is to say from the supplier, other forms through which we can obtain data of the suppliers can be:

• asking for information to them: or requesting it directly, for example, to its salesmen, representatives, etc. (for example, we can ask to them on its experience, its works carried out, their main clients, etc.). Or requesting it through electronic mail or a letter (for example, we can request information to him on its prices, the characteristics of its products, facilities of payment, ask to him that they send catalogs to us, budgets, etc.).
• visiting them: in order to obtain the data of the possible suppliers we can also choose to visit its companies and to observe, for example, the performance of its personnel, its organization, her attention to the client, its infrastructure, etc.
• looking for references: also we can look for references, for example, we can find out who are or have been their clients, to contact them and consult to them by its impressions, opinions or the satisfaction that they have with respect to the supplier.
• visiting its pages Web: a form fast and simple to obtain data of the potential supplier is visiting its page Web, where besides being able to obtain the data that they include in her, we can analyze its page to occur an idea of the company, a page neglected, is very probable that it means a business neglected.
• realizing tests: another form to obtain data of the potential supplier, is to put it on approval, for example, asking for a sample to him, doing to him an order and to evaluate if they fulfill the terms, to contract them for the production of a small amount of products, etc.

4. Evaluation of suppliers

Once we counted on a list of possible suppliers and counted on sufficient information of each of them, we passed to the analysis or evaluation of these on the basis of the established criteria.

For it we can make a comparative picture, where we indicate what offers each supplier or the qualification or appreciation that we give him with respect to each certain criterion.

An example we can see in the following picture:

	price	quality	payment	it gives
Supplier A	US$60	good	cash	to 5 days
Supplier B	US$50	to regulate	to 60 days	to 15 days
Supplier C	US$55	very good	to 30 days	to 7 days

And then, once made our comparative picture, we happened to evaluate the advantages and disadvantages of each supplier, considering that some criteria, such as the price and the quality, could have a greater value than others.

5. Selection of suppliers

And, finally, once we have made our comparative picture and we have evaluated the different alternatives, we passed to selection that one supplier that reunites the most advisable characteristics for us.

Like final note, we must indicate that he is recommendable to always count with more of a supplier, even so we are not going to use to all the suppliers that we have selected, is always recommendable to have them at the hand in case the habitual supplier diminishes the quality of its products or it does not fulfill the established agreements (for it, always we must evaluate permanently to our suppliers), is not possible to be given supply (for example, when increasing suddenly the demand), or cannot fulfill the required terms (for example, at times of high season).

Labels: Management of businesses, Step by step

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Related contents:

1. Criteria of selection of suppliers
2. Advice for the management of suppliers
3. How to establish relations of mutual benefit with the suppliers
4. The decision making