When are you going to to set up a business one of the details that you have to consider is Choose your suppliers well. They must be companies or professionals that do not fail you, that serve you on time and that communication is good. But how do you know under what supplier selection criteria to make the decision?
That is what we are going to talk to you about below so that you are clear about how to choose good suppliers and ensure that your business runs smoothly, at least in this sense. Shall we start?
Why you have to choose good suppliers
In case you don't know, choose and be happy with the suppliers you work with Not only does it help you know that the products you order from them will be useful to you, but you must also take care of the company's expenses and risks..
In other words, when we talk about choosing good suppliers we do not do so because you should base yourself on those that give you more for less. Nor in those who fulfill you ahead of time. Or that they don't overwhelm you when it comes to paying them.
No, in reality, when choosing, you should think about optimizing expenses, that is, having a balance between what it gives you and what being with that provider implies. In addition, you must also monitor the risks in terms of whether the products are served to you in a timely manner, that the payments are adequate, etc.
All of this will help you make better decisions.
Supplier selection phases
When choosing a supplier, you usually have to go through four phases.
The first of these is the supplier selection criteria. That is, what do you have to evaluate to choose or rule out suppliers who may be interested in serving you for your business.
The second phase would be search of suppliers. This, of course, is based on those criteria that you have established.
The third phase would be evaluate according to established criteria. In it a comparison is made between the selected suppliers and the criteria. Those who meet all the criteria would be potential suppliers; For their part, those who do not do so would be discarded.
Finally, the final phase would be supplier selection, where you make the final decision to choose one or several.
Supplier selection criteria
In the first phase is when they determine What are the criteria by which you are going to choose the suppliers to work with. Of course, we cannot tell you that there are fixed criteria because everything will depend on the type of company and the objectives you have in mind. But there are some factors that you could take into account.
These supplier selection criteria can be:
The supplier profile
With supplier profile we are referring to the analysis of that supplier. That is, what experience do you have in the sector, what companies you work with, what are your references, how do you meet quality standards, what geographical location do you have, what size, if the response capacity is good...
As you can see, there are many details and it is best to publish them both on their website and by having a small meeting to get to know them.
The price
The next supplier selection criterion is price, one of the most important for most businesses and companies. In this case, The price will help you determine if it is appropriate based on your expenses.. Of course, a very low price can mean that the quality of the products is not good, or that the response capacity fails.
And one that is too expensive may mean an expense that, in the long run, you cannot afford.
The technical capacity
Specifically, by technical capacity we are referring to the capacity that the supplier will have to respond to you. To give you an idea, we give you an example: imagine that you call your supplier because you need 100 items of a product.
A supplier with good technical capacity could serve them to you the next day. A bad one would take a month to do it. Of course, it all depends on the type of item.
But under this criterion we refer to this, the ability to respond to you and ensure availability, planning, procedures...
Technology and infrastructure
It is increasingly important to work with technology and use it for the benefit of companies to improve times, infrastructure...
Therefore, a provider that uses technology to its advantage and that has an infrastructure capable of serving the companies it works for will always be better than one that still does things the old way, especially because it may have more errors. the large one.
Service level
Finally, we would have the quality of the service, that is, If the supplier provides good service in terms of meeting deadlines, low error rates, and an easy returns process, that there is communication and efficiency in this...
If this fails, no matter how good it is in the other criteria, the relationship between company and supplier will not be good, and that will ultimately suffer.
Terms of payment
Another criterion to take into account when working with suppliers is payment conditions. That is to say, What are the payment methods and terms offered by the supplier. Believe it or not, this can be limiting in some companies. For example, imagine that a supplier asks you for payment in advance to serve you products; while another allows you to pay as late as possible, serving you the merchandise, letting you sell it and, thus, having cash to pay him. Which of the two would you choose?
Adaptability
Similar to the above, another important point is the ability of that supplier to adapt to what the company will need. If you are a good company and the work is going to be long-term, for the suppliers you would be a VIP client and that implies that they can give you better conditions or adapt to what you need.
Now that you have known the importance of establishing supplier selection criteria, if you had to choose, what criteria would you use to choose the suppliers to work with?