If you are looking for new suppliers for your business, you need to compare them based on various criteria and factors. Comparing potential suppliers can help you find the best fit for your needs, budget, quality standards, and expectations. In this article, we will share some tips and steps on how to compare potential suppliers and make informed decisions.
Before you start comparing potential suppliers, you need to identify your own requirements and expectations. What are the products or services you need from the suppliers? What are the specifications, features, or standards you require? How much are you willing to pay and what are the payment terms? How often do you need the deliveries and what are the lead times? How do you measure the supplier's performance and what are the key indicators? By answering these questions, you can create a clear and realistic list of criteria that you can use to evaluate and compare potential suppliers.
In addition, I would also encourage sourcing managers to define their ideal supply base - where would you want the suppliers to be located (domestics vs nearshore vs offshore), what size of a supplier would best fit with your organizational needs (small vs medium vs large enterprises), what are some critical factors on which you will evaluate your suppliers, and finally what is your end objective?
The key to an unbiased and effective comparison is making a metrics such as TQRDCM table and input audited data from potential suppliers. Weightage of each factor should be given as per organisation needs with subsequent ranking to each factor for selecting potential supplier
Once you have your list of requirements, you can start searching for potential suppliers that can meet them. You can use various sources and methods to find potential suppliers, such as online directories, trade shows, referrals, industry associations, or social media. You can also ask for quotes, samples, or references from the potential suppliers to get a better idea of their capabilities, quality, and reputation. You should aim to find at least three to five potential suppliers that match your criteria and are within your budget range.
After you have gathered enough information about the potential suppliers, you can start comparing them based on your criteria. You can use a simple table or spreadsheet to organize and compare the data, such as price, quality, delivery, service, reliability, and reputation. You can also assign weights or scores to each criterion based on your priorities and preferences. For example, you might value quality more than price, or delivery more than service. You can then calculate the total score or rank for each potential supplier and compare them side by side.
Once you have narrowed down your list of potential suppliers, you can start negotiating with them to get the best deal and terms. You can use your comparison table or spreadsheet as a basis for your negotiation and leverage your strengths and alternatives. You can also discuss the details and expectations of the contract, such as the scope, duration, payment, delivery, quality, warranty, and dispute resolution. You should aim to negotiate a fair and mutually beneficial agreement that meets your requirements and goals.
After you have negotiated with the potential suppliers, you should evaluate them before making a final decision. You can use various methods and tools to evaluate the potential suppliers, such as site visits, audits, trials, feedback, or ratings. You should also check the references and testimonials of the potential suppliers and verify their credentials and certifications. You should evaluate the potential suppliers based on their performance, quality, compliance, and customer satisfaction.
Always ensure to have a cross functional participation in the evaluation of potential suppliers. It also helps to have suppliers come onsite and present their solutions face to face to drive increased collaborating during the evaluation process. Finally, have a pre-defined score card that is updated post evaluation by all stakeholders to arrive at the final decision.
Finally, after you have evaluated the potential suppliers, you can select the best one that meets your needs and expectations. You should consider the results of your comparison, negotiation, and evaluation and choose the supplier that offers the best value, quality, and service. You should also communicate your decision to the selected supplier and the other potential suppliers and thank them for their time and interest. You should also sign the contract and establish a good relationship with the selected supplier and monitor their performance and feedback regularly.