How to choose the right supplier for the job

Posted in Inventory and warehousing.

Finding a reliable and trustworthy supplier for your business needs can be a time-consuming exercise. You need to know what you want from your supplier as well as weigh up different suppliers’ costs and standards of quality. Oftentimes, businesses choose a provider solely based on cost, which can turn out to be, well, costly in more ways than one.

Supply chain management consultant, Ray Carter, came up with the 10 Cs of supplier evaluation in an attempt to navigate the complexities in choosing the correct supplier. His article, originally published in 1995, identifies the key criteria on which every business should base their selection process. By using the 10 keywords as a starting point, you can standardise your company’s process, which will further enable you to evaluate potential suppliers fairly and impartially.

Let’s look at the 10 Cs and the questions associated with each one:

1. Competency – How competent is the supplier? Do they have the capability to fulfill your needs on an ongoing basis? Also, look at which other companies use this supplier and why?

2. Capacity – Do the supplier have the capacity to handle your needs on-time and without delay? Look at your minimum and maximum order requirements and whether the supplier can delivery these.

3. Commitment – This refers both to the supplier’s commitment towards an ongoing working relationship with your business as well as their commitment to delivering quality products every time.

4. Control – What processes does the supplier have in place to ensure consistent and reliable delivery? Do they perform regular control checks?

5. Cash – Is the supplier financially-sound? This could have serious implications for your business if your supplier runs out of money.

6. Cost – What is the cost of the product and how does it compare to other suppliers? Note, cost should never be the number one reason for choosing a supplier as other factors such as commitment to quality and a financially sound supplier are far more important factors to consider for securing a long term partnership.

7. Consistency – How will the supplier set about delivering a consistent product, and do they have specific processes in place to ensure this consistency?

8. Culture – Does the supplier have a similar work culture to you? This might seem irrelevant but it can be vital to ensure a good working relationship in the long run.

9. Clean – This refers to the ethical treatment of people as well as the environmental impact the supplier’s product might have. Are they following the correct procedures and does it align with your environmental policies?

10. Communication – How will you contact the supplier and how often? Do they have handy tools such as an ordering app to ease the ordering process? How will you raise and ultimately resolve issues?

Carter’s framework proves to be an effective way in which many businesses choose to tackle the process of finding the right supplier for the job. All of the keyword questions can be tweaked to better suit your specific industry, and as such find you the supplier with the right attitude and the same commitment to quality as your business.