No business should underestimate the importance of their supply chain. Without reliable, reputable suppliers, business operations would soon grind to a halt. That’s why it’s crucial to vet suppliers to ensure that they’re able to fulfil requirements. But how many businesses can truthfully say that they thoroughly assess a potential supplier from both a financial and risk management perspective? It’s a common problem to overlook the vetting process when new suppliers need to be on-boarded quickly.
Here are some tips to help ensure suppliers are up to the job:
Define what you need from a supplier
When liaising with a prospective supplier, it’s key to make clear your expectations. You should ask the supplier to demonstrate how they can be trusted to meet requirements. Also make clear what you need from the relationship, including good communication and customer service, and then decide whether they can work effectively with you.
Check for references
Quizzing a prospective supplier on who their clients are and previous work that they’ve carried out will help showcase their track record. Don’t be afraid to ask to speak to one of their clients and find out how they find working with the supplier, and whether you want to become one of their customers.
Find out what the supplier can add
Don’t view your supplier as just a back-office function – establish how it can change and add value to your business. Ask them to be specific about what difference they can make, e.g. do they offer a competitively priced product or service that enables you to pass on cost savings to the rest of your business? Or do they just ensure that you will have predictable monthly costs?
Once you know how they will improve your business, hold them to account and work with them to agree on objectives that are realistic and deliverable.
Assess your suppliers’ efficacy
Make a judgment on whether your chosen vendor can meet your needs for the short term and beyond. There are several areas of the supplier’s business that you should enquire about including:
Get a clear idea of cost
Discussing costs with a prospective supplier isn’t just about negotiating a good deal. You want to ensure that they’re being transparent with all of their costings. The key questions you should ask are:
Vetting suppliers is how you can future-proof effective relationships with them. By establishing their reliability and competency in delivery, you can prevent any unwelcome surprises further down the line.