Having a robust supplier base is directly related to a manufacturer’s ability to delight customers. How do you build that base? The answer depends largely on your business strategy, but here are some questions to ask and items to consider when choosing supplier partners:
1. What are your needs as a company?
Clearly understand the products and services you need before jumping into the supplier selection process. It’s difficult to find something you haven’t defined.
2. Does the supplier provide the components you need?
This seems obvious, but there’s more to it than having the right parts. Take total landed cost into consideration, along with value and quality. Make sure the supplier has quality standards and best practices in place to ensure you’ll get exactly what you ordered, every time. Look for suppliers that can provide extra value, such as vendor-managed inventory or supplier stocking programs. This will help keep your production moving, cut lead times and minimize issues that require follow-up.
3. Does the supplier hold any certifications?
If a supplier is ISO certified, for example, they are held to specific standards and have developed a process to meet those standards. While there are many variations of certifications in the supply chain world, any supplier who has committed to becoming certified won’t do anything to jeopardize that endorsement.
4. Is the supplier financially stable?
Check the supplier’s credit. A supplier that doesn’t have enough cash flow may not be able to consistently deliver what you need in a timely manner.
5. Is the supplier willing to be a partner?
Since you’re going to be working together on a regular basis, seek suppliers with whom you can build trusted relationships. Can they offer design or engineering expertise? Is their customer service on point? Are they willing to combine shipments in order to reduce the amount of time and money your company spends on components? Can you negotiate with them on minimum quantities? A supplier’s willingness to collaborate and exceed your expectations will make a world of difference when it comes to your experience and, ultimately, delivering the best products to your customers.
Once your new supplier is on board, evaluate their performance periodically using a scorecard system. This will help you determine whether the supplier is meeting your expectations or if they’re falling short. In the event they are underperforming, you’ll have subjective data to start a conversation with the supplier about needed improvements.
Creating a process around these questions and the needs of your company will go a long way to building a robust supplier base. Take your supplier selection process one step further by downloading our Prospective Supplier Evaluation Checklist, a valuable tool for objectively scoring a potential supplier, or give us a call to find out just how much work we could take off your hands as your next high quality, dedicated supplier.