Selection of Supplier How to Evaluate
Choosing a vendor is one of the most nerve-wracking, yet vital, tasks a company must perform. Your vendors will deliver your direct purchases, which are the ones you use to make the things you sell, as well as your indirect purchases, which are the ones that keep your business running smoothly.Which vendors should become your long-term business partners? Using a framework and the right tools to make the selection process easier,
Let ‘s Discuss today – How to do Selection of Supplier !!
Supplier Selection is really Critical Task . Some Supplier might be Best fit & Some might have some have hidden deficiencies. Another supplier might be more expensive with few addon valve and other might be cheaper without that.
The Supplier Selection begins as soon as there is an identified need for something what organisation choose not to make itself or cannot make Itself.
How we generally Find a potential supplier –
Sources of suppliers search are Online Exchange and auction, today Google is best to search anything. Trade magazines , Trade shows , Direct marketing , word of mouth from salesperson. We can also review our current supplier . I found Google & Trade shows are Important Tool these days..
Now you have a List of 10 Potential supplier!!!!!
Let ‘s Evaluate Now ::
Three Major Heads – COST , VALUE & RISK
Cost – There are three major Cost criteria Price of Product , Transportation Cost & Inventory Carrying Cost . These all head will lead you toward Product Landing cost
Value – These are competitive factors. Capacity of Vendor , Reliability, Flexibility ,Agility ,Technical Capability,& Quality. on these factors you can compare between your Ten potential supplier.
Risk – This category is risks. Risks are Availability ,Lead time and Price change. We need to go in detail for these risk factors.
Availability relates to risk – Can Supplier Promise it Capacity (Check with other buyers)
Lead Time – It relates to variation in Early or Late deliveries.
Price Change – Is there any chance that supplier increase price with in a given period of time of contract ?
There might be some other criteria also
– Financial Stability
– Innovative Process
-Commitment to Sustainability
I am attaching one of Template which You can use in Evaluation of your supplier
I hope this Template will help in comparing different supplier!!! Here it is detail video for hoe to choose right supplier fro your product.
Thanks for watching this Blog !!!
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