ARE YOUR SUPPLIERS MEETING YOUR DEMAND ?
Choose the Right Supplier for Your Business
Supply and demand is the name of the game and when your customers are counting on you , you need to know that your suppliers aren ’ t prohibiting you from meeting the demand . Managing the company ’ s vendor and supplier relationships is critical and you need to secure a vendor base that ensures that you ’ re able to deliver your products and services on time , at the right price and in line with your high quality standards . But how do you know which supplier is the right supplier ?
Don ’ t select your suppliers based on price alone .
Instead , save yourself significant headaches and stick to your standards when vetting your vendors .
These four tips will help you identify suppliers that will help you meet your customers ’ demands .
1 . Define Your Plan of Action
How will you identify potential suppliers ? Will you put out a call for bids or will you identify a short list based on research and referrals ? Take a moment to think through your plan and answer the following questions :
• How will you identify suppliers ?
• How long will the search period last ?
• Who will review proposals and help narrow the list ?
• How will final bid submissions will be evaluated ?
2 . Identify Your Selection Criteria
The first step to choosing the right vendor is to compile a list of criteria upon which to base your search . Setting your search criteria in advance will help you evaluate potential suppliers on the qualities that matter most while ensuring that nothing is overlooked . Your list could include :
• Lead times from receipt of an order to delivery
• Minimum and maximum order quantities
• Storage and handling facilities
• Quality assurance processes
• Payment terms and conditions
• Delivery methods
• Return policy
• References
• Agreement or contract period
3 . Put Out the Call & Evaluate Bids
Once you ’ ve identified your selection process , reach out to your top candidates for a Request for Proposal or a Request for Quotation . The bid should include full details of the products or services you are requesting as well as quantities , delivery dates and quality standards . It is also a good idea to ask bidders additional information about the following :
• The processes they use
• The stability of their raw material suppliers ( if applicable )
• The reasons they believe you should choose to work with them
4 . Monitor Performance
Mistakes happen from time to time but , with the right procedures in place , they don ’ t have to be the end of the world . The best way to maintain your supplier relationship is to maintain regular communication . This can be done by :
• Ensuring that you have a direct point of contact with the supplier
• Conducting regular performance reviews
Working with the right supplier can help you serve your customers better while ultimately minimizing cost and maximizing efficiency . Work through the points mentioned in this article to ensure that you have the best suppliers to help you along your business journey . You can also give me a call to discuss the effectiveness of your existing suppliers or to put together a process that works best for you .
SUPPLY by : Kyle Stemple
CPA , CGMA , Principal & Regional President 122 Fourth Street NW
P . O . Box 1020 New Philadelphia , OH 44663
( 330 ) 308-6883 kyle . stemple @ reacpa . com
DEMAND