Criteria of selection of suppliers

21 October 2009 - 16:44

The suppliers that a company owns will determine the success of this one to a great extent. Counting on good suppliers not only means to count on quality consumptions and, therefore, to be able to offer quality products, but also the possibility of having low costs, or the security to always count on the same products whenever they are required.

Reason why whenever we must choose to our suppliers, we must take our time and to evaluate the different alternatives well that exist.

A first that determines a company at the time of evaluating supplier is the price and the quality of its products or services; nevertheless, other criteria or factors besides the price and the quality exist, that are due to take into account at the time of being decided by a certain supplier. We see which are:

Price

One of the main criteria that are due to take into account at the time of evaluating a supplier, is their prices.

Always we must to try suppliers with prices reasonable, that is chords to the quality of the product or service that offers, and to the prices average of the market.

When evaluating the price of the product, we must also consider the expenses that could be added to this one, such as the expenses of transport, insurances, packing, etc.

Also, at the time of evaluating the factor price, we must consider the possible discounts that the supplier can grant to us, such as discounts by vol. of purchase, discounts by soon payment, etc.

Quality

Don't mention it serves to have a supplier with low prices, if the quality of its products or services is bad.

The quality is another one of the main criteria to take into account at the time of evaluating a supplier.

Whenever it is possible to us we must try suppliers that offer consumptions, products or services of very good quality or, in any case, that the quality of these is in agreement with the prices that they have.

When evaluating the quality of the product, we must take into account the materials or components from the product, their characteristics, their attributes, their durability, etc.

Payment

In the criterion of the payment we evaluated the modes of payment that offer the supplier, for example, if it offers the possibility of making payments via banking transference, or via Internet.

And also we evaluated the conditions or the term of the payment, for example, if they ask to pay to us cash, or they give the possibility us of paying to 30 days, of paying a 50% to 60 days, etc.

We always must look for the best conditions of payment, that is to say, that the financing or term of the granted credit is the possible major, without it implies surcharge some. While better conditions of payment, major liquidity for us.

Although we must consider that when initiating relations with a supplier, is little probable that this one grants some commercial credit to us, reason why we must at least find out if the possibility that more ahead exists it can happen.

Delivery

Another criterion important to consider at the time of selecting a supplier is the delivery, where first that we must evaluate it is that if the supplier requires of a minimum order to be able to work with us.

In the delivery criterion also we evaluated the delivery opportunity, if they are able to assure to us that they will always fulfill our orders, that to us will give them opportunely we require whenever it, that always will tell on the same product, that they will be able to supply the year throughout to us, etc.

And also we evaluated rapidity or downtimes, that is the time that passes since we make the order until they give the product to us, for example, if they make the delivery of the product to the 3 days, the 30 days, etc.

Service of post sale

In the Serb of post sale we mainly evaluated the guarantees that the supplier can offer us, what guarantees grant to us and which is the period of these.

Also we evaluated the qualification that can offer us in the use of its products, the technical attendance, the maintenance service, its policy of returns, the possibility of exchanging products of low rotation, etc.

Other factors

The criteria that we have mentioned previously are most important and those than we must more consider at the time of evaluating and selecting a supplier; nevertheless, also other factors exist that always are good for considering:

• experience: to greater experience of the company supplier, probably greater efficiency and security in its supplying.
• reputation: we must consider, for example, if the testimonies of their clients are favorable.
• organization: if, for example, its personnel is described, if he has a good system of distribution.
• location: while more close the best supplier is located, mainly if we are those that constantly we must go where this one.
• service to the client: if, for example, they are able to offer all the information quickly us that we require.
• advertizing agreements: if, for example, they offer the possibility us of granting products to us in exchange for publicity free.
• economic situation: if its economic situation is stable it could mean quality products and a safe supplying; if it had financial difficulties, it could means a possible diminution in the quality of its products (when wanting to reduce its costs), the possibility that they stop taking care of our orders (for example, when failing to fulfill the payments of its own suppliers), little possibility that they grant finamiento to us (due to its necessity to have liquidity), etc.
• size: if it is a small supplier, probably their attention is more direct (for example, the possibility that they solve better any disadvantage than we have), major flexibility to adapt to our needs, and major to be able of negotiation for us; if it is a supplier is great, probably it has major efficiency and security of supplying, but a minor to be able of negotiation for us.
• manufacturer or wholesaler: the main advantage of the manufacturers with respect to the wholesalers is their low prices, but its main disadvantage is that probably they cannot offer the variety of products that yes could offer a wholesaler to us, mainly, when doing small orders.

Labels: Management of businesses

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