Suppliers are a crucial part in any business. Finding and keeping exceptional suppliers are fundamental to success.
Previously vetting suppliers only involved 4 factors:
- Location/ Proximity;
- Capacity; and
- Product selection.
However; in today’s competitive market it also involves long lasting business relationships, reliability and shared standards which include:
- Safety records;
- Employee satisfaction; and
- Customer care.
Consider the fact that suppliers are an extension of the business therefore it is imperative that they are trustworthy and transparent with business practises.
The best relationships are built on thoughtful communication, training and trust. However ensuring that supplier and or vendors are thoroughly vetted will eliminate risk to the business.
At Uphando we will assist in determining whether a Supplier and or Vendor is a suitable partner for your business:
- Due Diligence: Make sure the companies’ credit reports, online reviews and news reports have a clean reputation with a strong balance and sufficient cash flow.
- Structure size and management team: Make sure this works for your business. The experience and philosophy of the company, which is often on their website, combined with the structure the company has may show how they will interact.
- Safety and Integrity: If possible, ask to see the safety records. Are there written policies and procedures in place? Do the procedures reflect how the management teams’ concerns for safety and product handling suit your business needs?
- Quality: Does the potential supplier keep quality and reliable products and shipping procedures that they are willing to share and discuss?
- Employee Satisfaction: Ask about the employee turnover and the average length of their service. It might be a red flag if the turnover is very often. Is training provided regularly? Are the company and its employees keeping pace with industry innovations?
- Communication: How eager is the potential companies’ employees to assist and answer questions? Do they share information freely? A great deal can be determined by telephonic or video conference.
- A Face to Face meeting: This is a very critical part. If the business relationship is important enough, a face to face meeting will reveal a great deal about how the company operates. Is it organised, clean, convenient for transportation? Or is it chaotic, messy and difficult to move stock around? Are they open about their strengths and weaknesses? Are the employees competent, cooperative and proud of the company?
What is the value of Credit checks?
Major or strategic suppliers’ financial status should be vetted frequently. The credit history provides insight into the companies’ spending habits and financial background. Suppliers who have sound financial backgrounds are far more likely to deliver quality products on time. The spending habits assist in identifying whether the company is meticulous in their operations and if practices are inconsistent.