How to onboard the best suppliers for the best supplier management
There’s no doubt about it: The COVID years and beyond have been some of the most disruptive since the proliferation of multinational, global supply chains.
All this disruption has focused a spotlight on the need for better supplier management and careful planning of procurement and sourcing for different contingencies.
Good supplier management starts with understanding supply management (the act of buying physical goods, data, services, or other essential resources that enable you to operate and grow continuously).
In addition, supplier management (the working relationship you establish–and rely on–with all your suppliers for goods or services) is essential for timely, reliable, and efficient sourcing and procurement.
For small-to-medium-sized businesses (SMBs), good supplier management brings together previously siloed personnel and processes, generates economic value with stronger relationships, and ensures you gain and maintain a competitive edge in a constantly shifting world.
How to optimize procurement, sourcing, and supplier management
Looking to add new suppliers to your “stable?” It’s essential to keep in mind that price isn’t the sole factor in making a good selection. You’ll also want to check and verify new supplier certifications and quality and manufacturing standards, including ISO, QS, and the like.
Next, you’ll want to align a potential new supplier’s manufacturing and shipping locations to your production and storage needs. Do you need a multi-location supplier or a single warehouse? Balance the cost-effectiveness of using a more prominent supplier vs. being able to negotiate a better price from a smaller business with a single location or stringing together multiple suppliers to meet your needs.
Most factories specialize in single product types or categories, so you’llalso want to look for a supplier’s expertise in your product type and target market. By doing this, you’ll go much farther in ensuring your new supplier is familiar with common quality issues related to your product, can identify and proactively fix problems, and be relatively familiar with your quality and legal requirements.
To determine whether your new supplier can produce enough of what you need and how quickly they can respond to demand fluctuations, you’ll need to assess their commitments to other customers. You’ll also need to know whether they can provide the required staff, equipment, storage, and materials.
While some suppliers may offer eye-popping low prices, you’ll want to be sure you’re not buying into disruption due to tenuous labor relations or political upheaval in an economically or politically unstable environment.