Monthly Archives

February 2018

How to identify qualified suppliers

How to Identify Qualified Suppliers and Avoid Those That are Not

By | Purchase Order Plus | No Comments

Are you looking to purchase some goods or materials for your company? In that case, you will need a supplier for these. Finding a good supplier is a key part of the procurement process, so if you have not already established a relationship with one (or if you have, but want to change your vendor for some reason), in this post we will discuss how to identify qualified suppliers for your business.

Vetting suppliers that will ensure that you will get your ordered goods on time and for a good price requires answers to some important questions, a lot of research and some strategic thinking on your part, but once you do that, you will probably be set with a supplier for a good time.  This is because, ultimately, you want to find a vendor that you can establish a positive and lucrative business relationship with for a long time.

Here are the steps you need to take to select a supplier that can help your organization:

Do Your Research

If you are procuring an item you haven’t before, or if it’s a service you haven’t had the opportunity to deal with so far, the first thing you need to do is to research the potential suppliers.

There are several ways to do this and the first step is to make a list of five or more suppliers. From here, you can further narrow it down until you find that one vendor that meets your needs.

Here are some of the ways you can do basic research to find suppliers in your area:

  1. Search on Google for suppliers. While this is not something you should rely on, a quick search on Google for suppliers is a good place to start. Once you find some, be sure to visit their websites to find more about them.
  2. Look in trade publications, trade journals, supplier catalogs. This is a step above from a simple Google search as most qualified suppliers will be listed on these.
  3. Browse Yellow Pages. If you need to find a supplier in your city or area, Yellow Pages can be a good resource to do that.
  4. Talk with your colleagues. Finally, you can ask your colleagues and people in your industry if they have a supplier to recommend. Keep in mind, however, that what works for them may not work for you and you will still need to dig a little deeper to see if that supplier has what it takes.

Once you’ve done these (we recommend doing at least two of these steps), you should have a list of several suppliers that meet your broad needs. From here, the next step is to evaluate each of them individually.

Evaluate the Potential Suppliers

In order to reduce the risk of supplier failure, you need to conduct some of these checks:

  • What is their company structure?

Does the supplier have a parent company? This is an important question as you need to know if they or someone else has control over their business objectives, direction, as well as processes and policies.

Do they work in partnership with other companies? Are these companies someone you want your company to be connected with?

  • What are their operational capabilities?

Make a personal visit (or send someone in your name) to the supplier’s sales office, warehouse and manufacturing plant to see first-hand how they conduct their business. Does the place seem well-organized and everybody know what to do or is it chaotic? Even small things like a broken faucet in the toilet can be an indication that something is not right.

  • Ask the supplier for refferences

Interview those that have already worked with the supplier. What do they have to say? Is it positive? Ask what convinced them to work with this particular supplier in the first place. Also, if they no longer work with them, as them to explain to you why.

  • Look how they use their resources

When it comes to using resources, you should evaluate both how the supplier uses the technology and human resources. Do they use the latest technology? What do their employees say? Do they enjoy working here? You don’t want to work with someone who treats their workers poorly.

  • Investigate their financial health

Is the supplier in good financial health? You can use Dun & Bradstreet to evaluate their financial stability (or instability for that matter). This will tell you if you should be working with this supplier long-term or not.

Conclusion

These questions will help you learn how to identify qualified suppliers that you can establish a relationship on the long run. If you have any more questions or comments about finding suppliers, let us know in the comments below the post and don’t forget to sign up for early access to Purchase Order Plus software and to like our Facebook page.

3 crucial things in a supply chain management: time, cost, quality

Why is the Supply Chain Management Important?

By | Purchase Order Plus | No Comments

In the age of Internet, online communications and social media, many of the old rules of doing business no longer apply. Companies, if they want to stay relevant in their industry and grab their piece of the market, need to embrace new business processes, especially when it comes to satisfying their customers. One such process that companies shouldn’t neglect is the supply chain management.

What is the Supply Chain Management?

A supply chain is the system a company uses to get products to customers. It includes everything from obtaining raw materials to delivering the final product into the customer’s hands. As you might have guessed, there is a lot that can go wrong in-between these two steps, which is why it’s important for a business to have a superb supply chain management system.

Why? Because, at the end of the day, customers are only concerned with one thing – getting their product and getting it fast. Speed is essential and is what a good SCM needs to address.

But speed isn’t everything. In fact, try to go to fast and you might crash somewhere else. As such, a supply chain management needs to also ensure that speed doesn’t endanger the quality or the price of the product. This is where maximizing efficiency comes into play in the SCM.

Understanding the Importance of Supply Chain Management

What makes the supply chain management important for companies? A couple of things actually:

  1. A way to one-up competition. Lower price isn’t the only way to get an advantage over your industry competitors. A good supply chain management system can also allow your company to deliver the end product faster to the customers, thus gaining their trust over the competition.
  2. Lower operating costs. Delivering a product to the customer can cause quite a few headaches. This is why companies need to use a good SCM that will help them lower operational costs, from production costs, distribution costs and any other related costs in the supply chain. Each of these in the end adds up to the final cost of the product that the customer will have to pay. In addition, a supply chain management also helps delays in production. Any such delay can be costly and a SCM helps avoid them.
  3. Improves the company’s negotiating position. Companies are often “at the mercy” of suppliers and retailers. But with a good supply chain management, they can greatly improve their position at the bargaining table. After all, what supplier doesn’t like working with an efficient business? Prove that you can deliver your products to consumers on schedule and the suppliers ought to look much more favorably on you.
  4. Overall better customer service. In the end, it all boils down to how happy customers are with your service. A good supply chain management can help a long way with this. Most importantly, they will receive the products they ordered on time and in the quality and quantity that they expect. For example, if you order a pizza and you get the wrong one, with the wrong ingredients and the wrong size, would you be satisfied?
  5. Strengthening the company’s financial position. We already explained how costs can pile up during a supply chain. A good SCM can help control, decrease and even eliminate some of these redundant costs. In addition, if your company has a good supply chain manager, who knows his job, he or she can help you decrease overall costs by ensuring a better and more efficient use of assets such as production plants, warehouses or transportation.

Conclusion

A lot can go wrong between making the product and delivering it to the customer. However, a supply chain management can diminish these dangers and allow your company to satisfy the customer needs.

Are you looking for a good purchase order system? Purchase Order Plus is an addon software for mobile Xero that can improve your cash flow, generate reports easier and let you allow access only to those you want. Sign up for early access for POP today.