Quality supplies are the lifeblood of any successful enterprise. Indeed, one of procurement’s most important undertakings is to identify and align organizations with quality suppliers. These suppliers not only have to meet shipping requirements, pricing parameters, and quality control, quality suppliers can do this over and over again on a long-term basis. Consistent quality supplies mean that enterprises can provide the best goods and services to its prospect and maintain their brand value, profit margins, and overall market share.
Identifying great candidates that can successfully meet these requirements has never been easy. However, for today’s electronic buyers, the task has become extremely erroneous due to a host of factors: tariff issues, trade wars, component shortages, counterfeiting, increasing changes in the global business environment. These and many other outside forces can take a toll on the procurement’s foundational capabilities, which is securing and working with the best suppliers.
So, how can you identify new sourcing suppliers?
1. Check Certifications
Many buyers are usually not keen when it comes to supplier quality certifications. However, it must be established that suppliers do not either make it easier for buyers to view and verify their distribution and supply certifications. Therefore, it is highly advisable to check for specific supplier certifications such as a certificate for international standardization organization ISO and certified quality assurance certification QS.
2. Evaluate Geo-Political Climate
While overseas suppliers can provide rock-bottom prices and superior resources, poor political relations and tenuous labor tensions can leave businesses without the right products and supplies. As an enterprise or individual, take the time to investigate and analyze the potential for unrest in the areas you plan to source products. In addition, analyze any cases of political instability in areas you rely on for your supply chain success.
For instance, the US-China trade war has had lasting implications on imports and exports. Markets have been affected, consumer spending overhauled and businesses disrupted due to this economic confrontation. On July 6th of 2018, the Trump Administration imposed 25% tariffs on $34 billion worth of Chinese imports – making this the first case in a series of tariffs imposed between 2018 and 2019. China retaliated with tariffs on $75 billion worth of American imports. Poor trade relations underlie the reason enterprises must analyze political unrests to avoid frustrations and shocks in their supply chains.
3. Align Manufacturing and Shipping Locations to Your Organization’s Needs
Depending on your manufacturing requirements, determine your need for a single-warehouse or a multi-location supplier. Facts reveal that shipping requirements and associated costs highly differ by the locations a supplier has to offer. You may be able to negotiate for better prices for a single business with a single location or string multiple suppliers to meet your business needs.
Aligning manufacturing and shipping locations to your organization’s needs will save time, money, and resources in your routine supply chain activities. In addition, enterprises must target suppliers with convenient shipping locations to ensure they save money, particularly for perishable products.
4. Look For Expertise in Your Product Type and Target Market
A supplier will be more familiar with common quality issues if they have experience manufacturing or distributing a similar product. The suppliers are likely to identify and fix quality issues proactively before those issues affect a large portion of your order if they are indeed familiar with your product type and target market. For example, if a factory is experienced in supplying to your target market, it will be more familiar with your legal and quality requirements.
Oliver Knack, writing on 10 Quality Tips of the Best Suppliers, notes that most companies specialize in single product categories and product types. Knack informs buyers to check their suppliers’ Alibaba profiles for clues about what they are specializing in or exporting.
5. Check Your Supplier’s Financial Health
Your preferred supplier must be in good financial health. This is because cash-positive suppliers are in a position to weather off the ups and downs of economic uncertainty. So, one of the most pertinent questions buyers must ask is whether the supplier has plenty of cash, or whether he is financially overextended. Buyers must also consider information that suppliers can offer to validate their ongoing financial strengths.
Embark On Your Journey for a New Quality Supplier
Buyers must consider weather-related risks such as tornadoes, rain, snow, and drought, as they all have severe implications on supply chains. In selecting potential sourcing suppliers, assess the weather-related conditions emblematic with each region of supply. In addition, evaluate how weather-related conditions could dictate your ability to maintain your enterprise.
Evidence shows that it is important that buyers carefully review detailed product information and related data to identify whether suppliers have the right products for your application. If a supplier provides easily accessible product charts, graphs, information, and specs, it means they are as helpful as possible to win and sustain your enterprise.
In searching for a new quality supplier, it is important to ask for accessible inventory information. Having visibility to your supplier’s inventory can be advantageous. Visibility is an indication of their commitment to you and their ability to provide what you need, whenever you need it. It is also crucial to know your supplier’s scalability, investigate their commitment to superior customer service, and obtain a lead time and delivery statistics.
Whether you’re sourcing in the supply chain, sourcing tactically, or strategically it’s important that you understand the role of sourcing suppliers in all of this.
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To discuss procurement software with a consultant or to schedule a demo of our solutions, contact us today.