How do you measure the impact of a new supplier on retail sales? This is a crucial question for any retailer who wants to optimize their inventory management, customer satisfaction, and profitability. In this article, you will learn about some key metrics and methods that can help you assess the performance of a new supplier and compare it with your previous or existing ones.
One of the most important factors that affect your retail sales is the quality of the products you receive from your suppliers. Poor quality can lead to customer complaints, returns, refunds, and damage to your reputation. To measure the quality of a new supplier, you can use a supplier quality score (SQS), which is a numerical rating that reflects the percentage of products that meet your standards and specifications. You can calculate the SQS by dividing the number of defect-free products by the total number of products received from the supplier, and multiplying by 100. A higher SQS indicates a better quality supplier.
Own your production funnel! Easier said than done. What is better than chasing a higher SQS score is for a company to aim for owning their production. As a result you have full control over quality, cost, and will not be at the mercy of suppliers. This way customer satisfaction is guaranteed through higher quality and consistent availability.
Another factor that influences your retail sales is the timeliness and accuracy of the deliveries from your suppliers. Delayed or inaccurate deliveries can result in stockouts, lost sales, and dissatisfied customers. To measure the delivery performance of a new supplier, you can use a supplier delivery score (SDS), which is a numerical rating that reflects the percentage of products that are delivered on time and in the right quantity and condition. You can calculate the SDS by dividing the number of products that are delivered as expected by the total number of products ordered from the supplier, and multiplying by 100. A higher SDS indicates a more reliable supplier.
An SLA(service level agreement) can also help on assessing the supplier, record the orders or LPO given against order fulfillment and this helps in telling you the kind of supplier your dealing with.
A third factor that affects your retail sales is the cost of the products you purchase from your suppliers. Higher costs can reduce your profit margin, limit your pricing flexibility, and affect your competitiveness. To measure the cost efficiency of a new supplier, you can use a supplier cost score (SCS), which is a numerical rating that reflects the percentage of products that are delivered at or below the agreed price. You can calculate the SCS by dividing the number of products that are delivered at or below the price by the total number of products ordered from the supplier, and multiplying by 100. A higher SCS indicates a more economical supplier.
To measure the overall impact of a new supplier on your retail sales, you can use a supplier impact score (SIS), which is a weighted average of the SQS, SDS, and SCS. You can assign different weights to each score depending on your business objectives and priorities. For example, if quality is more important than cost, you can assign a higher weight to SQS than to SCS. You can calculate the SIS by multiplying each score by its weight, adding them up, and dividing by the sum of the weights. A higher SIS indicates a more beneficial supplier.
To compare the performance of a new supplier with your previous or existing ones, you can use a supplier comparison method, which is a graphical or tabular representation of the scores of different suppliers. You can use a bar chart, a radar chart, or a table to display the SQS, SDS, SCS, and SIS of each supplier, and identify the strengths and weaknesses of each one. You can also use a benchmarking approach, which is a comparison of your suppliers with the best practices or standards in your industry or market. This can help you set realistic and achievable goals for your suppliers and improve your supplier relationships.
To evaluate the performance of a new supplier over time, you can use a supplier evaluation method, which is a periodic review and feedback process that involves collecting and analyzing data, communicating and collaborating with the supplier, and taking corrective or preventive actions if needed. You can use a supplier evaluation form, which is a document that summarizes the scores, comments, and recommendations for the supplier, and a supplier evaluation meeting, which is a meeting that discusses the results and expectations with the supplier. You can also use a supplier evaluation system, which is a software or tool that automates and streamlines the supplier evaluation process and provides reports and insights.
Es importante medir la presencia del proveedor con activación en el punto de venta y las opiniones del cliente al interactuar con el producto.