Evaluating New Suppliers

When working to develop or plan a supply chain, it is hard to find a great partner. Working with a great partner can save you time, money and mitigate business risk so you should take the time to find the most compatible suppliers and vendors.

Supplier evaluation is the process of assessing, reviewing and then approving a vendor by utilizing a set of pre-set checklist of qualitative and quantitative data.

There are a variety of methodologies that include the 10Cs, scorecards, questionnaires, on-site visits and third party certificate reviews. While I advocate for a holistic approach to all methodologies, here are the best ways to approach this process:

MINDSET. Review the company as a partner, do you want to jump into a long term relationship and grow with this company and their management? Or are you looking for the lowest price? You should think of a supplier as a mutually advantageous relationship. To find a great supplier, you must be ready to invest time and money for it to work.

CREATING AN RFQ DOCUMENT: Creating an RFQ document with key information will help get a larger picture of each supplier. In the RFQ stages you should be gathering information like the location, the point of contact, the manufacturing capabilities, materials, business certifications, traditional timelines and key business information. The RFQ stages will help you gather price estimates and get a holistic picture of your potential partners objectively. While also gathering technical information, you should also be recording qualitative data.

QUALITATIVE DATA: During the RFQ stages you should include details on your communications. Did you have to chase the vendor for an update? Are there any miscommunications or misalignments during the initial review stages? Is the vendor open to a visit? Is the vendor interested in your business? These are a few questions to ask yourself and consider while reviewing the quality of potential suppliers.

REFERENCES: So you’ve narrowed down a few vendors and you’re interested in pursuing sampling stages with them. There is an opportunity to ask the vendor for a professional reference from an existing customer. Be aware that some vendors may not be as open if there’s high confidentiality, but it is extremely helpful when they’re willing to do so.

With all this said - the most crucial thing that you can do is to have complete transparency, consistent communication and someone within visiting distance.  While working with international suppliers, your company should utilize an agency company like Victure (www.victuregroup.com ) that can provide visibility on your suppliers, translation support, cultural alignment and expertise on manufacturing & quality. By utilizing an agency you can have them provide a holistic review of the vendors’ capacity, verify the certificates and business licenses, review their management team, see facilities, and check operations amongst other things. The agencies can also help tap into their existing networks for trusted suppliers. A good supplier can make or break a business, so invest in this part of your search.

Join the following groups for off-shore sourcing opportunities-

China Sourcing- https://www.dhirubhai.net/groups/4462099/

India Sourcing- https://www.dhirubhai.net/groups/8454669/

Vietnam Sourcing- https://www.dhirubhai.net/groups/8815822/

Asia Sourcing- https://www.dhirubhai.net/groups/8909383/

Gifts and Premiums- https://www.dhirubhai.net/groups/4421652/

Circular Economy- https://www.dhirubhai.net/groups/13908783/