As someone who has built upon a network of several long-term business relationships, I understand the importance of selecting and utilizing the products and services from carefully selected vendors. Not all suppliers are created equal, and after 24 years of dealing with a variety of vendors, I’ve learned what to look for when selecting a supplier/vendor.
Keep in mind that what is favorable for my company, may not be as favorable for your company. For example, my product and service company requires suppliers who can meet expedited production at times, deliver consistent high quality, and provide competitive pricing. Other companies, depending on what product or service they sell, may be hell-bent on finding the lowest price, or quickest turnaround.
Here are five areas that I consider when qualifying and choosing suppliers:
Product vs. Sales Oriented Outlook
Some companies thrive on jumping through hoops for customers. Others, simply don’t have to. If I call one of my label plants and ask for an expedited job, I expect them to try to help, even if it throws a wrench into their production schedule. Some of the other, typically larger outfits, may require a longer time to gear up for a job, so their production schedules must remain tidy.
I’ve found a simple litmus test I use when providing big projects to production departments. If it is a job that may require a quick turnaround, then I aim for the smaller sales oriented job type shop. If I require a low price on a high volume run, I know to use the larger outfits. The simple test? Simply speak with the folks who are in charge of that company, and ask what their backgrounds are. The difference between someone with a sales background and someone with a production background will quickly become apparent. Sales people tend to thrive on pleasing customers; production people tend to thrive on less hassle.
Make sure to consider the investment the company makes in its business, equipment, and people. If a company just invested in a $200,000 printing press that tells me they are investing for the future. On the other side, outfits with old equipment, employees with stale skills, and really nothing new to offer, may not be the best fit to begin a business relationship that prospers. Doing business with companies who invest in employee training and who aim for constant improvements in their business will translate into more successful relationships.
Niche Market and Specialty
Not all business models are the same. In my industry there are smaller job type shops, and huge economy of scale companies. Each business model has pros and cons. When you can, it is often a good idea to consider outfits that don’t try to do it all. For example, in my industry there are label outfits that specialize in blank labels, other may focus on only durable labels, and yet others may focus on only high end coupon labels. For a lot of these specialty outfits, or those who may only do a few things well, it is certainly worth your time to explore what they may have to offer. This could help you uncover some ideas for your marketing plans. It could also save you a lot of money by avoiding the one stop conglomerates.
This one is simple. Are the employees happy? Do they complain? This one is also important to me because of the long-term business relationships that we try to develop. One of the secrets of companies of all sizes is to retain talent, and reduce turnover. Not only does turnover get expensive with re-training, but it also has the ability to frustrate customers.
Consistency and Reliability
Imagine visiting a restaurant that was not consistent. How long do you think they’d remain open for business? In today’s world, people demand perfection. There are now plenty of companies that have the proper technology and knowledge out there, so you should never have to compromise.
This goes beyond decent quality. Even the little, seemingly trivial tasks become important over time. For example, I had a vendor who would send me purchase order confirmations within 24 hours. Then, apparently she became overworked, because the confirmations, if they would arrive at all, would sometimes take a week or more to receive. So I would have to email or call to make sure the order was received, then find out the current lead time, etc. That was my time that was wasted, and it also added to her afternoon agenda. Hassles like that may seem trivial, but they are time and resource hogs.
The 5 areas outlined here are what I use to qualify pending and existing suppliers. Hopefully you can apply these to your business. Feel free to contact me with some other ways to qualify suppliers.