Choosing a supplier

It is essential when selecting your suppliers that you choose those that not only offer you the best prices, but also the best service. Some companies that have achieved ISO9000 accreditation will deal only with companies that are also accredited, seeing the quality symbol as an indication of a 'quality' company. Others might have a list of criteria that a supplier must meet before they will purchase from them.

Should you receive a request for goods that none of your regular suppliers can fulfil, then you need to identify suitable sources. Generally, you would draw up a shortlist of possibles and send each a request to quote for the order. Your list could be compiled from the following sources:

• colleagues, or contacts in other companies;
• trade journals;
• buyer’s guides; or,
• directories.

When choosing which quotation to accept, you might compare commercial aspects such as price, discounts, payment terms or delivery dates, and particularly with lucrative orders you might also visit the suppliers’ premises. Once your decision is made, you would add the supplier to your approved list.

Evaluating performance

It is important that you regularly evaluate all suppliers, not just new ones, and monitor their performance. The types of things to measure would include:

• timeliness of delivery;
• quality of goods supplied;
• price/discount/payment terms; and,
• standard of service.

It is up to you to determine what is acceptable and what is not; given the choice between a company which is cheap, delivers on time, rarely sends defective goods but whose staff are surly and unhelpful, and one whose prices are average, which usually delivers on time, rarely sends defective goods and whose staff are very pleasant and helpful, which would you plump for?

You might determine a scoring or rating strategy, perhaps weighted in such a way that those elements that you consider most important score more highly than those less important to you. You might set upper and lower levels of acceptable performance, so highlighting suppliers that deviate from the norm. Whatever you do, you must have some sort of system for evaluating performance.