How can you build a supplier database?

1 Identify your sourcing needs

The first step is to identify your sourcing needs, such as the products or services you require, the specifications and quality standards, the delivery and payment terms, and the risk and sustainability factors. This will help you define the criteria and requirements for selecting and evaluating suppliers. You can use tools such as a spend analysis, a category analysis, or a sourcing matrix to help you identify your sourcing needs.

2 Search for potential suppliers

The next step is to search for potential suppliers that can meet your sourcing needs. You can use various sources and methods to find potential suppliers, such as online directories, databases, platforms, or marketplaces; trade shows, fairs, or exhibitions; industry associations, networks, or publications; referrals, recommendations, or testimonials; or your own research, outreach, or cold calling. You can also use tools such as a supplier identification checklist, a supplier profile template, or a supplier screening questionnaire to help you search for potential suppliers.

3 Collect and organize supplier information

The third step is to collect and organize supplier information from the sources and methods you used in the previous step. You can use various formats and tools to collect and organize supplier information, such as spreadsheets, databases, software, or cloud-based solutions. You should collect and organize supplier information that is relevant, accurate, and up-to-date, such as their contact details, capabilities, performance, and compliance. You should also categorize and prioritize supplier information according to your sourcing needs and criteria.

4 Analyze and evaluate supplier information

The fourth step is to analyze and evaluate supplier information from the collection and organization you did in the previous step. You can use various techniques and tools to analyze and evaluate supplier information, such as SWOT analysis, Porter's five forces analysis, supplier scorecards, or supplier audits. You should analyze and evaluate supplier information that is objective, consistent, and transparent, such as their strengths, weaknesses, opportunities, and threats; their competitive advantage, bargaining power, and market position; their quality, delivery, cost, and service; or their compliance, risk, and sustainability.

5 Select and negotiate with suppliers

The fifth step is to select and negotiate with suppliers based on the analysis and evaluation you did in the previous step. You can use various criteria and tools to select and negotiate with suppliers, such as best value for money, total cost of ownership, or strategic fit; request for information, request for quotation, or request for proposal; or contract terms, conditions, or clauses. You should select and negotiate with suppliers that are reliable, responsive, and collaborative, such as their ability to meet your specifications and standards; their willingness to offer competitive prices and discounts; or their readiness to establish long-term and mutually beneficial relationships.

6 Monitor and update supplier information

The sixth and final step is to monitor and update supplier information from the selection and negotiation you did in the previous step. You can use various methods and tools to monitor and update supplier information, such as feedback, reviews, or ratings; performance indicators, metrics, or reports; or surveys, audits, or inspections. You should monitor and update supplier information that is timely, relevant, and actionable, such as their satisfaction, loyalty, or retention; their improvement, innovation, or development; or their issues, challenges, or opportunities.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?