Written by: Mike Edmunds

Posted on: 26/04/24

Picking the Right Suppliers for Your Business

How do you know the supplier is right for your business?

It seems like a no-brainer. You want the best possible suppliers for your business in terms of quality, value, and compliance. You need reliability, accountability, and capability from your suppliers. When you look to take on new suppliers, you are inviting them to become an extension of your business, and therefore they need to reflect positively on you, and be demonstrably a true asset to the company.

So how do you know? You get to know them better. You ask the right questions. You ask for supporting evidence of their answers. You do this early on in the process, and you open the call with clear, succinct expectations – the same transparency you expect, you must also offer.

It’s common practise to use a tendering aid in the form of software – for larger tenders, you might experience a lot of suppliers vying for the same contract, and it can be difficult to keep track of them all, their answers, and how well they score against your requirements. Using dedicated software helps to grease the wheels, and can give you accuracy as well as speed, so you can trust the data you have and also see value faster.

How do you get the best value out of your suppliers?

Speaking of value, for many procurement professionals, getting good value suppliers is one of the most important factors to consider. Cost-saving is step number one, and it’s an easy way of demonstrating how successful your procurement strategy is – lots of money saved = successful strategy.

It’s not the only ‘value’ a supplier can offer your business, however. Another example of good value a supplier can demonstrate is their value in terms of compliance. A supplier who can demonstrate that they comply with your business requirements with certifications may be worth more to your business than a cheaper supplier who cannot demonstrate they comply.

You should have decided on and advertised your standards at the tendering stage, thus doing some early-stage weeding – however, an online auction is the next step to further whittle down the competition whilst ensuring you get the best possible deal.

How do you ensure supplier compliance?

Compliance with a capital ‘C’ is increasingly important in the supply chain. Regulations of every variety are tightening, and the consumers you serve have higher expectations and more access to data regarding the brands they spend their money with.

It’s in your best interest to ensure early on that the suppliers who form the basis of your offering comply with your standards, be they ethical, environmental, quality-based, or otherwise.

How best to do this, without throwing hours away every week double-checking every certificate and constantly updating supplier scorecards?

A digital solution can help to streamline the process of ensuring compliance. The process starts, of course, at the tendering stage – you ask preliminary questions, you receive answers and supporting certificates – then you take the suppliers to auction to get more value from them still.

When you have your winning supplier(s), then you must on-board them and draw up contracts which plainly state the expectations of either party. It is at this point that more questions can be asked, and more certification requested.

An online portal in which pre-determined questions are presented to suppliers who access them via private login, is a secure and streamlined method of on-boarding. It removes manual legwork from the equation and ensures that the data is as accurate as possible – plus any discrepancies can be easily identified and followed up with.

It also makes requesting certificates easy, and digital copies can be held in the system for future reference alongside answers.

Of course, this can be documented manually on a spreadsheet, or a form emailed directly to the supplier for their return, but if a question is not answered, or a certificate is not sent, then it is up to the procurement team to chase suppliers for their information before the process can continue, wasting valuable time.

How do you measure whether a supplier is performing for your business?

Once you’ve sourced and on-boarded your suppliers, the next step in the process is to manage the ongoing relationship and the performance of the supplier.

This involves developing a set of KPIs against which to measure, which can include such indicators as reliability, price fluctuation, and other relevant performance indicators such as quality.

With this knowledge, you can make more informed decisions regarding your suppliers, based on the tangible impact they have on your business – rewarding them with further business, or encouraging improvement with the warning of withdrawal.

How can you showcase this information to relevant stakeholders?

While there’s no rulebook which states that your results must be presented stylishly, the visual aid of having dynamic dashboards and reports aids engagement with and reception of supplier management results.

Even better if the reports and dashboards can be generated from existing data sets within the same system, saving you even more time.

The benefits are obvious – it’s easier to communicate potentially complex information with stakeholders using a visual aid, and what can boil down to a series of numbers and statistics becomes a compelling narrative of success.

It can reflect positively on the argument you are trying to make – whether that is advocating for a change in supplier, budget concerns, or any number of procurement-related issues.

If you have confidence in your suppliers and their data, are confident that they’re saving you money or confident that they’re serving your business well and improving your offering, then you can be confident in the overall success of your procurement strategy.