A good supplier or vendor is paramount to the success of your business. Suppliers play a critical role in your activities and processes, determining their outcome. For example, a parts supplier fails to meet your quality standards, and you end up returning the items, which holds up your production process.
You can mitigate the risks by sending back purchases with a service managing a return to vendor process. But then you would still have to deal with the potential costs of delayed production.
As such, it’s crucial that you find the right vendor. Here is a quick guide:
You need a supplier who can ship your items on time and in good order. Big companies are usually the most reliable because of their considerable resources. Still, partnering up with smaller suppliers has its advantages. If you’re their major customer, you could expect preferential treatment in terms of price and priority.
Suppliers who have been in the business for years are usually the most stable. In addition to longevity in the business, you could also look into the reputation of the vendor. What is the feedback from previous clients? Has the vendor grown over the years? Is the vendor a market leader?
Suppliers that are near your place of business are always preferable. You can expect prompt deliveries, and you might need to spend on freight costs. There are also cases in which overseas suppliers offer significantly lower rates; suppliers from different countries may also offer you with raw materials you can’t source locally. If you can’t avoid working with overseas suppliers, make sure they go through a meticulous vetting process to avoid problems with quality and delivery in the future.
Finally, once you find the right vendor, maintain a good relationship by implementing a management process. An effective management process will allow you reduce supplier risks when it comes to operations and regulatory compliance. It will also allow you maximize their performance as you keep track of deliveries and products, and determine whether they meet your needs. A management system further develops relationships because an efficient process keeps the lines of communication open.
With a good supplier, your business can grow.