How do you evaluate and select new suppliers?

Selecting suppliers begins with understanding and documenting your requirements. Next, detail attributes like reliability, quality, cost, and delivery timelines, using quantifiable metrics for Total Cost of Ownership. Move to the RFQ phase, seeking proposals from suppliers. Evaluate across predefined criteria; subsequent rounds may be needed with feedback. By now, shortlist suppliers based on evaluations. Conduct thorough background checks, gather references, assess financial stability, and align with business values. In final stages, negotiate mutually beneficial terms, establish clear communication channels, and conduct regular performance evaluations for ongoing satisfaction.

* New Suppliers Should Be Evaluated and Selected Based on Carter’s 10 Cs: 1) Competency - How competent is the supplier? 2) Capacity - Does the supplier have enough capacity to meet requirements? 3) Commitment - Is the supplier committed to providing exceptional quality? 4) Control - How much control does the supplier have on supply chain? 5) Cash - Where is the supplier standing in terms of financial performance? 6) Cost - What is the cost of the products that supplier provides? 7) Consistency - Is the supplier committed to providing consistent high quality? 8) Culture - What is the supplier’s business culture? 9) Clean - Do they have a sustainability policy? 10) Communication - What are the supplier’s communication styles?

As part of a generally accepted good quality management system (ISO 9001:2015, 21 CFR Part 820, etc.), it is a best practice to establish a classification system for prospective suppliers before they are evaluated for consideration as a partner with direct access to your company's property and indirect impact to the quality of your goods and services. A classification system should define the nature of the supplier relative to their overall impact to quality on your operations. One approach is to utilize a simple ranking system ("A", "B", "C", etc.) to classify the supplier's services on a scale establishing greatest potential for impact to least potential for impact on quality before conducting a supplier evaluation.

Before you start searching for new suppliers, it's crucial to define your exact requirements and expectations. This will help you narrow down your search and identify suppliers who can meet your specific needs. Consider factors such as the type of products or services you require, the quality standards you expect, the desired pricing, and the desired delivery times. By clearly defining your requirements, you'll be able to make informed decisions and choose suppliers who can contribute to your business goals.

Once your requirements are clearly defined, it's time to delve into market research and uncover potential suppliers who can meet your needs. This involves gathering information from various sources, including online directories, industry publications, trade shows, and industry experts. Look for suppliers with a proven track record, a strong reputation, and the capabilities to deliver high-quality products or services at competitive prices.

Market research is very important task for every procurement professionals, How to do this:- 1) Without Maintaing good relationship with industry experts, peers, reputed suppliers in the market its difficult to gain deep Insights instead of online tradebooks, because industry experts closely touch with overseas cartels they knows updated informations as well as future forecasts 2)Industry reports and publications also helpful, but attainding industry networks seminars is more insightful they have more expertise and accurate markets future predictions 3) Attained and visit worldwide Industry exhibitions, you will gain industry experts networks meet them face to face is helpful to build strong repo

As soon as you decide that the product has to be developed by a new supplier, then the best practice is to conduct market research on who is in the industry producing similar products. Assess their financial reports, quality PPM, and delivery performance with their current customers. By which you will understand, how the supplier sees the business.

One thing I have found helpful while doing market research is setting pre-defined standards according to the objective and template we prepared in the first step (Identify your requirements). On setting the standards, we can search for suppliers in tools like SAP Ariba Discovery post which is very helpful for finding appropriate suppliers. We can clearly define some of our requirements like quantity, delivery location, manpower required, delivery time needed etc. Once they post their responses or ask any questions we can answer them, compare with our standards and then decide which of the suppliers we can contact for the next step i.e sending proposals

Você encontrará mais oportunidades de acordo com o maior número de fornecedores que você incluir no funil. A constru??o de uma lista de potenciais fornecedores deve ser realizada continuamente, com visitas a feiras do setor que a sua empresa atua, revistas ligada ao seu mercado, pesquisas on-line, indica??es, estudo dos concorrentes dos seus atuais fornecedores e outros.

Once you have narrowed down your options, it's time to request proposals from the shortlisted suppliers. Provide each supplier with a clear and detailed request for proposal (RFP) that outlines your requirements, expectations, and evaluation criteria. Compare proposals based on factors such as price, quality, delivery time, technical specifications, and overall value proposition. Consider conducting site visits or interviews with potential suppliers to gain a better understanding of their capabilities and commitment to your need.

Actually I disagree with some of the buyers selecting the suppliers only based on particular criteria like cost/quality. There are many criteria to be considered.So, here once potential customers are identified through the above step, sending them RFQ/RFP/RFI based on our need. 1. Develop predefined templates for each sourcing event with details of our organization, organisation policies, schedule for this event like last date for submission, criteria we expect, pricing forms or questions they need to answer us as additional appendices, on which we criteria we select them 2. Develop an evaluation matrix according to QCDIS criteria (Quality, cost, delivery, Innovation,sustainability) with % allocated to compare the results of the supplier.

A formal NDA is needed before you share any technical details with them. Once you shortlist the suppliers and understand they can be the best fit for your organization, then proceed with the evaluation of their RFQs. A scoring system can be made based on the price, manufacturing lead time & incoterms. Make sure which supplier matches the specifications listed by you on the drawings. The more boxes ticked by any supplier - It is easy to take a call.

Estruture um documento com todas as premissas e restri??es do projeto, busque equalizar as informa??es internamente de maneira que todas as dúvidas sejam sanadas nesse próprio documento, sem a necessidade de que os fornecedores precisem entrar em contato com você para tirar dúvidas simples. O documento precisa ser claro e objetivo. Defina um prazo para retorno das cota??es e fa?a o fallow up para que você tenha todas as resposta no tempo estimado. Defina os critérios de avalia??o e classifique as cota??es recebidas.

Reach out to potential suppliers and ask for proposals that detail how they can meet your requirements. Review these proposals carefully to see which ones align best with your needs. For example, if you're a tech company looking for a hardware supplier, you might evaluate proposals based on factors like product quality, pricing, and warranty terms.

Before you finalize your decision, it's crucial to conduct thorough due diligence on the shortlisted suppliers to assess their financial health, operational capabilities, compliance status, and potential risks. This involves reviewing financial statements, checking for legal issues, verifying certifications and accreditations, and conducting site visits or audits to gain firsthand insights into the supplier's operations. By performing due diligence, you can minimize the risk of making an uninformed decision that could negatively impact your business.

Perform the due diligence as soon as you figure out that the supplier is meeting your expectations. Upon evaluating the complete details submitted by the supplier, draw a SWOT analysis and have an open talk with the supplier. Even if you reject them, they should know the reason why you have rejected them.

Before making any decisions, do your homework on the suppliers you're considering. This might involve checking their financial stability, visiting their facilities, or talking to their existing customers. For instance, if you're a construction company, you might visit a potential supplier's manufacturing plant to ensure they have the capacity to meet your demand for building materials.

Early in the process of supplier selection, addressing non-negotiable terms and conditions from the outset is a strategic move. It's a proactive approach that filters out suppliers who may not align with your critical contract requirements, saving valuable time and resources. This practice (that I've learned through many mistakes) not only streamlines the selection process but also reinforces the importance of clear communication and mutual understanding in successful business partnerships. It's not just about finding a supplier; it's about finding the right partner for your business journey. ?? #SupplyChainManagement #BusinessStrategy #NegotiationTactics

Risk assessments are key considerations prior to finalizing a decision and often forgotten when performing due diligence. While it's important to consider a suppliers financial, delivery, and quality performances, it's even more important to consider suppliers capacity abilities. Suppliers are often wanting more and more work to keep them busy for the next few years, but often don't share their plan on how to meet those obligations when they often have a backlog of work in the current and future year(s). Knowing how they plan to expand capacity with new or additional capital investments as well as hiring/retaining workers needs to be considered especially when they are currently struggling to hire key positions for months or years.

Once you have carefully evaluated proposals, performed due diligence, and identified the best supplier for your needs, it's time to negotiate the terms of the agreement. Be prepared to discuss pricing, delivery schedules, quality standards, payment terms, and any other relevant aspects of the partnership. Aim to reach a mutually beneficial agreement that aligns with your business goals and the supplier's capabilities. After reaching an agreement, formally select the supplier and establish a clear communication plan for ongoing collaboration and performance tracking.

The final step is negotiation before signing the contracts with the supplier. It's not just the prices. What is the warranty provided by the supplier? What are the Payment terms that they have agreed on? Are they accepting the liability clauses demanded by you? All these decide the competitiveness of the supplier and the product.

Once you've narrowed down your options, negotiate terms with your preferred suppliers. This could involve bargaining on price, delivery schedules, or payment terms. After negotiations, select the supplier that offers the best overall value for your business. For example, if you're a retailer, you might choose a supplier who offers competitive pricing, flexible payment terms, and reliable delivery.

Before negotiating and going into the final contract with any new supplier, it is better to get the samples along with the specifications from the supplier, first to check out the quality of the required product which should be according to the company quality standards. To avoid any ambiguity regarding the product after receiving a final shipment.

Supplier development is a process that you enjoy a lot if you follow the process meticulously. In the process, you will get to know the complete value chain of the industry. Don't prefer any supplier just based on the pricing. There are a lot of other factors that decide whether the supplier is best or not.

There are various ways to do this, both formal and informal. Formal evaluation generally follows questionnaire, checklists, audits etc. Informal evaluation is more subjective based on a physical site visit and the look and feel that one gets. Irrespective of the method its important to see syngeries in the supplier process and a company's current and future needs. Cost should not be the only driving factor.

I fully agree ??. - Performance in regards to QHSE - Complexity of design - Relationship - local rules and regulations - Culture

Many times we do not look at a vendor/supplier as a multi-year engagement. It is important to understand their architecture, scaled pricing models, security posture...etc.

Finally, think about any additional factors that could impact your decision. This might include factors like the supplier's location, their environmental practices, or their ability to scale with your business. For example, if you're a manufacturer, you might prioritize suppliers who are located close to your production facilities to minimize shipping costs and delivery times.