Identifying the right supplier may be difficult, and a sizable proportion of procurement teams consider this the most challenging component of their job. Knowing how to find and choose a supplier ensures that the products and services are supplied on time, at a suitable price, and according to your standards if you work with a reliable and trustworthy provider. Your client’s happiness and your company’s image might be damaged if you make a mistake in selecting a supplier.
The capability of your business to supply high-quality products and services at competitive prices may be hampered if your supplier cannot be relied upon or does not produce high-quality items.
A well-designed procurement process will guarantee that the business firm connects with the appropriate supplier. According to a recent study, the procurement outsourcing industry is predicted to reach USD $5.03 billion by 2025. This is a clear indication that the procuring process of identifying suitable suppliers has led to economic growth. Get a piece of that growth by understanding how to choose suppliers.
No. Really…How Do You Choose a Supplier?
This article will walk you through the eight most important actions to take to identify the best potential suppliers for your goods, components, or raw materials.
1. Price
Price is one of the critical factors to consider from a supplier. However, you shouldn’t merely pick a supplier based on their price alone, especially if the purchase is non-commodity items. When it comes to general costs, low-quality products and services may not be the best choice in all cases. Be satisfied that your supplier needs to earn a sufficient profit at the specified price for the company to remain in business.
2. Conduct Market Research
In the digital world, it’s becoming easier to conduct due diligence online and discover information via searches and by reviewing the websites or blogs of the potential suppliers of your products or services.
While not all suppliers have company websites, most have developed a digital presence via networks, virtual stores, and establishing a presence in supplier platforms. You may have to do some exploration in the markets to get the important information you need to help decide about organizations you are thinking about engaging, but this discovery process is vital when choosing a supplier.
3. Ask for Samples/Trials
These are free. However, you may be liable for delivery costs. This will assist you in deciding on the appropriate service provider or manufacturer for your good quality. Your intuition plays a significant role in finding quality items and in choosing a supplier.
However, hands-on analysis of a supplier’s service or product is necessary to ensure that the service or product will fulfill your needs. You may test your goods in the market after finding a dependable supplier to determine whether your clients/buyers are interested. It’s also good to ask for tangible evidence like images, video clips, or detailed information of the facility, products, or services offered.
4. Ascertain Supplier Authorization
When you hire a firm or company for your products or services, be sure the provider has a solid reputation, has been in business for a while, and has no documented problems. They may also include a manufacturing certification stamp from the location, which is an additional plus. For suppliers with unique products but newly in the market, it’s advisable to test their samples/products by observing their products for a while and getting reviews from their first clients; this will increase the chances of getting quality products. Also, for the manufacturers of products, one can agree with the supplier to provide a warranty of their products that are new in the market.
5. Examine the reviews
The best way to make a final judgment on the list of suppliers you’ve engaged with is to get recommendations from previous customers. If you use one of the leading marketplaces, such as Amazon, you can check the reviews directly from their sales page. Still, if you find the supplier elsewhere, such as the internet, you’ll have to communicate with other people who’ve used them or do some due diligence on your own.
6. Understand supplier’s scaling
The supplier’s ability to accommodate small and large orders is an essential factor to keep in mind. If you’re seeking smaller numbers of samples, you’ll likely discover providers that specialize in that amount. If you demand massive shipments of the goods over time, you may soon exceed your initial supplier choices. To ensure that you’re working with a supplier that can easily expand to meet your changing requirements, you need to know the product’s growth trend and have some sense of the supplier’s ability to fulfill your expected demand.
7. Recognize The Distribution Networks In Your Business
Products may go from the producer to the merchant in a variety of ways. All suppliers aren’t aimed at the same customer base. To identify the best supplier for your business, you need to know your company’s distribution networks and supply chain in detail. Suppliers come in various forms, including service providers, subcontractors, manufacturers/producers, distributors, and importers.
8. Get To Know The People That Provide Your Goods And Services
Until now, while it has been commonplace to visit your suppliers and tour their factory (even if you can’t afford it initially), the circumstances of today’s global commerce footprint coupled with the impact of the pandemic have made that difficult.
The good news is, technology has made it possible to reduce some of the logistical challenges and costs while preserving the significant due diligence needed. The motivation, however, is still the same – gaining better knowledge may provide you with a wealth of new insights. It also cements your connection with the supplier, and you are no longer a nameless client in another nation.
5 Tips To Achieve Supplier Collaboration
It’s not an exaggeration to say suppliers are the center of the supply chain’s success. No matter what industry you’re in and the products you sell, you won’t accomplish much without collaboration with suppliers.
Supplier collaboration is among the top priorities for many organizations in today’s growing on-demand economy, where supply chain competitive advantage is a value creator.
What Is A Supplier?
A supplier, also known as “vendor,” is a person, organization or business that provides goods or services to another entity. Their role is to supply a high-quality product or service at the best optimal price to buyers.
The Importance of Suppliers in Business
Suppliers have a significant impact on every stage of the product life cycle. It’s no doubt that the relationship between suppliers and buyers is critical for a solid business foundation. Suppliers play a crucial role in how fast your business grows and maintains your success. Hence, it’s vital to build a strong relationship with suppliers and treat them with utmost respect and loyalty.
Benefits of Supplier Collaboration
Major buyers with advanced procurement practices have been actively looking for ways to build trust and cultivate supplier relationships. Strong collaboration could create significant value and help the supply chain become more resilient.
A survey from McKinsey of 100+ large organizations in multiple sectors has shown regular collaboration has higher growth, lower operating costs, and greater profitability than their competitors.
How To Improve Supplier Collaboration – From Supplier Perspective
Despite value at stake, many procurement professionals still face challenges integrating suppliers into their overall procurement strategies due to ineffective communication, lack of transparency of shared values, and misalignment of goals.
In this article, we list some steps to tackle this issue that you should take into consideration.
Supplier Collaboration is Not Simply Cost-Based:
Successful supplier relationships are not transactional but a close, collaborative partnership. The strategic procurement approach goes above and beyond demanding cost reductions. As an organization is near-transparent by openly sharing their challenges, suppliers feel like they’re a part of the team and more comfortable sharing their insights that potentially deliver results far beyond buyers’ expectations.
Regular Communication From The Early Stages:
Regular communication creates a shared understanding, which avoids confusion and disagreement. Communication is a two-way street, so it’s critical to achieve effective communication by regularly checking in with your suppliers and keeping them engaged in every stage of the project.
SupplierGATEWAY’s clients have utilized QuickConnect Matchmaker tools to optimize their effective communication with potential and existing suppliers. Procurement professionals use our tool to screen and initiate a call online or in-person for a new project.
Collaboration is a Win-Win Strategy
A successful collaboration should be a win-win for both parties. Understanding and facilitating their needs while safeguarding your benefits is the smart way to gain a long-term relationship, which procurement professionals tend to forget.
Similar to buyers, financial stability is one of their priorities to maintain their business success and provide the highest quality products and services to you. Cash flow is the heart of a supplier’s business. Over 20 years of experience working with buyers and suppliers, we found that the short payment term has proven practical and appealing to suppliers. It allows them to reserve cash to pay for the things they need to run the business.
A study from Xero has revealed that 70-80% of businesses offer payment terms that have two weeks or less. Besides, over half of these businesses request payment within 7 days.
SupplierGATEWAY’s virtual payments enable buyers to pay suppliers via automated delivery of virtual cards and earn 1.5% or more cash back for every transaction, no matter the size.
Streamline New Opportunity Posting:
All that suppliers want is to have more buyers. To achieve that goal, they have to simultaneously outreach and keep an eye on new opportunities from multiple buyers, which is not easy to manage. As a buyer, keeping them in the loop with this easy-to-use tool is the best way to attract the most talented suppliers into your projects.
It can be a significant challenge to integrate a software-centered approach into your procurement practices, especially considering you may have hundreds or thousands of suppliers. The power of technology simplifies your efforts by delivering turnkey ready to use systems for tracking supplier data, purchase orders and their performance all in one place. What you need to focus on primarily is how to build collaboration momentum with suppliers.
Supplier management software also enables suppliers to effectively manage their lower-tier suppliers and reporting, which gives buyers more control over the lower-tier supplier’s data and ultimately lowering costs and improving quality.
Best Stakeholder Management Practices For Procurement That You Should Know
In an enterprise, Procurement’s job is to ensure stakeholders get the right goods or services provided by suppliers, on time and at the right quality level. Procurement success is tied to how well you work with the stakeholders and what you can do to help them to succeed in what they want to achieve. Their success is not only the company’s success but also yours. As such, it’s crucial for Procurement to have a good stakeholder management strategy.
Who are the stakeholders in the procurement process?
A stakeholder is an individual or organization that benefits from or is affected by the project, product or service. In procurement, stakeholders are broadly divided into two major categories – Internal and External stakeholders.
Key Internal Stakeholders in a procurement activity include those who operate within the organization, such as procurement managers, budget owners, manufacturing, finance and legal team.
Key External Stakeholders are those who contribute to the project but are not directly connected to the organization. Suppliers and other partners are considered external stakeholders.
Why Does It Matter?
Many surveys show that stakeholders often do not cooperate and only give feedback once a major issue arises. This has caused challenges to procurement to successfully do their job due to the limited comprehension of what value/ expectations the stakeholders want.
This article lists six practices that successful procurement professionals leverage to build a solid relationship with stakeholders.
Plan Out Stakeholder Engagement Strategy:
First of all, it’s vital to plan out an engagement strategy and communication plans. By doing so, you identify research your key stakeholders, how much support you will need for the project, and what stakeholders’ communication preference is. Skipping this step directly impacts your outcome, such as missing stakeholders, identifying wrong people as stakeholders, budget variances, or worse – your project can fail.
Understand Your Stakeholder’s Requirements And Speak Their Language
Do your homework before talking to stakeholders. Many stakeholders care about cost and savings, but you may be surprised to find it’s their secondary importance. Start building a relationship first, have an initial exploratory conversation to understand their goals and expectations for that project/activity. What you want is to become an expert that stakeholders will ask relevant questions at a later time.
Don’t forget to speak the stakeholder’s language instead of using unattractive procurement jargon. Modifying the ways in which buyers express opinions or ideas is a more compelling way to build an interpersonal rapport.
Once you build a strong relationship, everything you care about, such as cost or saving, will come later. Otherwise, you may impact their interest right from the beginning.
Internally Prioritize Importance And Relevance of Key Stakeholders:
Not all stakeholders are equally important in any given project. There are two important criteria to help you properly prioritize the needs of stakeholders – the level of interest and influence. As a rule of thumb, those with a high level of interest and influence are considered key stakeholders. Conversely, those with a low level of interest and influence only have a minor impact on decision-making.
Be Proactive And Early Engagement:
It’s critical for procurement professionals to drive a culture of regular communication and mutual collaboration across the organization. These activities include joining the regular meeting with stakeholder’s departments, joining the kick-off meeting to set the project’s foundation, etc.
The earlier you engage with key stakeholders, the better you’re involved in the negotiation process. Positive working relationships add higher value to the outcome and be more likely to be a part of the project’s decision-making process for any changes.
Transparent Procurement Activities And Invest In The Right Tools:
Being transparent in procurement activities is one of the best ways to build trust and enhance clear communication with your stakeholders. Everything is made more accessible and efficient with the right tools. Take the time to explore what technology options are available out there and what solutions these technologies offer are the best for your organization. To identify that, you need to understand what obstacles and bottlenecks that your organization is facing.
How About External Stakeholders?
After discussing with stakeholders and defining what needs to be done, it’s time to implement your procurement plan. It includes identifying, shortlisting, selecting and acquiring suitable goods or services from multiple third-party vendors through direct purchase, competitive bidding, receiving and fulfilling payment, etc., while ensuring timely delivery in the right quality and quantity.
It’s a daunting process for procurement professionals. Fortunately, digital technologies allow you to easily manage suppliers, quickly respond to market demand at a much lower cost than doing it manually. With the right pick of software, procurement is likely to have a game-changing impact across the entire organization.
SupplierGATEWAY’s easy-to-use, instant-on and inexpensive software facilitates the entire procurement and supplier management process to increase operational efficiencies, reduce costs and streamline communication with suppliers. A portal administrator can tailor custom business rules, create unique workflows, and modify user roles and permissions. In addition, the software is configured to quickly accommodate any necessary changes in your project to ensure you source and diversify the best-qualified suppliers while delivering your project on time and within budget.
Enhanced Digital Certification— A New Digital Era for Engaging Diverse Businesses
In today’s complex sourcing landscape, a diverse and inclusive supplier base is now widely accepted as a procurement best practice; from creating bottom-line savings and creating future demand, to projecting a better more socially oriented image. Hence, supplier diversity initiatives are highly recommended if you’re looking for a sustainable way to promote innovation and economic impact while creating competitive advantages that can differentiate your organization.
A study released by the Hackett Group found companies with diverse supplier lists drive an additional $3.6 million to a company’s bottom line for every $1 million spent on operations costs in procurement. This is literally “doing well by doing good.”
It would seem that establishing and implementing a supplier diversity program shouldn’t be difficult, but it is. One common refrain by buyers is that it can be difficult to find diverse suppliers, especially in niche industry spaces.
Current Challenges
To find one of the reasons behind this challenge, let’s look at the supplier’s side. To be a qualified diverse supplier, they must:
Be well-qualified, including creating a business, surviving, being innovative, and being as good or better than their competition for cost, quality, and service.
Spend time and money to go through a lengthy process to be certified as diverse-owned. It’s no surprise that many small business owners view this as an added “tax” on their business.
Hence, many suppliers decide to be self-identified as diverse instead of getting certified, which unfortunately does not meet many buyer’s inclusion program requirements, especially in big corporations.
As a result, it negatively affects procurement professionals’ opportunity to expand their diversity program, and diverse suppliers get left out. This is the paradox we sought to break.
With a mission of Making it Easier to Do Business™, SupplierGATEWAY is thrilled to launch Enhanced Digital Certification (EDC), a new innovative and robust digital certification program – a powerful tool to address all the challenges we mentioned.
What is Enhanced Digital Certification?
Enhanced Digital Certification™ (EDC) is a new, innovative and powerful digital certification program designed to enable all types of diverse businesses to reduce the hassle of acquiring a valid certification of diverse ownership.
EDC is gaining widespread acceptance by some of the most prominent advocates of inclusive purchasing – all of whom also seek to create new economic impact at scale. By digitizing and streamlining the diversity certification process, we have made it easier, faster and much less costly for suppliers to achieve diversity certification.
Verify Your Suppliers Electronically 24/7 At No Cost
Everything you need to know about a business’s diverse ownership is in this digital certification. You can look up the business information by scanning the ECC QR code, entering the certification ID in your SupplierGATEWAY portal or accessing the SupplierGATEWAY EDC Validation API connected to your ERP and purchasing systems.
Unique QR Code can be used to validate certification status 24/7! EDC QR Codes can also be placed on websites, literature and emails.
Only One Click to Get All Information You Need
You can easily find potential and current suppliers’ diverse information by using their certification ID in your portal’s search tools or even simply scanning the QR Code in the certificate to receive all information you need.
Detailed business information after scanning QR Code
Using the “Verify Enhancement Digital Certification” box to verify suppliers’ certifications
While You Read This Blog, EDC is Already Configured In Your Portal And Ready-To-Use
If you’re a buyer and currently using SupplierGATEWAY’s software, everything is FREE – there are no hidden costs. We hand you this power to freely and quickly source qualified diverse suppliers. Once a new supplier registers in your portal, they have an option to start the application.
EDC Process
Sponsorship Opportunities – Maximize Sourcing Power and Make A Significant Economic Impact on The Community
To make a mark on accelerating inclusion and diversity, we offer unique opportunities to sponsor diverse suppliers’ costs to get certified in a targeted area or market, or for specific diverse business groups that you are trying to engage. By doing so, your business speeds up a certification path for eligible suppliers. You get the satisfaction of directly contributing to the economic impact of every business you sponsor.
Our program has already gained traction, and we’re thrilled that Amazon Business and LA Clippers already took the initiative to grow their supplier bases speedily.
This is an excellent opportunity to show your commitment to the community and align with the corporation supplier diversity goals while aggressively sourcing the mass number of small and diverse suppliers your corporation is seeking.
Some additional benefits include:
Create business opportunities for small and diverse businesses to grow and scale
A Path To Business Success – Grow Together, Win Together
By encouraging your current and potential suppliers to get the EDC, your business increases the volume of opportunities to multiple suppliers – from minority-owned, women-owned, veteran-owned, LGBT-owned, service-disabled veteran-owned, historically underutilized businesses.
In the past few years, the massive shifts underway in the business and social landscape towards inclusive procurement have proved that integrating supplier diversity into business operations is not just the right thing to do but also benefits everyone. EDC is here to help build your supplier diversity program successfully.
Creating a Request for Proposal (RFP) is a crucial business practice that allows a company to identify and engage the right supplier to satisfy a requirement. A well-written RFP substantially increases your company’s chances of getting the services or products you need at a price that works for you. The ultimate goal is to ensure you’re working with qualified suppliers at what you consider the best value.
In this blog, we will give you a clear picture of what RFP is and list five tips for writing an effective RFP that can help you get high response rates.
What Is RFP?
According to Wikipedia, A request for proposal (RFP) is a document that solicits a proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals.
In simple words, an RFP is a document created by a buyer requesting information about a product or service requirement, generally sent to suppliers to propose solutions. The purpose of an RFP is to enable buyers to compare the features and prices across potential suppliers.
A great RFP contains clear criteria that are important to a buyer. By properly structuring and articulating the requirements in an RFP, you can identify how well each supplier understands your project and set benchmarks to measure a project’s success later.
RFP Format
This is one of the biggest challenges in crafting RFP, mainly because there is no standard format. The typical RFP includes sets of questions that are split by section and subsection, which is more important for large or complex requirements.
RFP responses can be as simple as yes/no interrogations or require narrative responses. Additionally, suppliers may be requested to submit other information and send additional documents such as the company introduction, why they believe they’re a better fit than the other competitors, etc., to explain the rationale behind the answers.
What Key Elements Should Be Included In RFP?
Though each RFP varies based on the goals and needs of a project, there are a few core elements that should be included in most categories (according to HubSpot):
Background/Introduction
Project Goals and Scope of Services
Anticipated Selection Schedule
Time and Place of Submission of Proposals
Timeline
Elements of Proposal
Evaluation Criteria
Possible Roadblocks
Budget
Tips To Write A Compelling RFP
When you are putting together an RFP for any category, it is critical to provide a clear overview of the project to attract the best responses. With these five tips in mind, you can be confident that the RFP process will be productive for you and the suppliers who elect to participate.
Planning
Planning what to put into an RFP will save you a ton of time in the process of reviewing and selecting the right suppliers. Regardless of the scope and complexity of your RFP, these three main components should always be at the top of your mind. (i) Making sure you have clearly defined your need, (ii) establish your communication strategy and (iii) define your evaluation criteria.
Stakeholders Involvement
An RFP is all about solving problems for your business. To draw great responses from the suppliers, you must ask the right questions. How can you achieve that? Collaborate with stakeholders. Coordinating with people who will be impacted the most by your purchase will help you identify the challenge, the tools you need, and define success. Bringing these people into the early stage of writing RFP will help prevent scope ambiguity and unclear requirements to suppliers.
Be careful to separate our needs from wishes. Unless money is no object, you may have to clarify what you must have versus what you would like to have, if possible. The process of determining this also has an impact on how you set your evaluation criteria.
Set Important Dates
People usually underestimate the importance of time when writing an RFP – both theirs and the suppliers’ time.
Write all critical deadlines that suppliers should know, such as the response date, pre-bid document submissions, implementation date, etc.
Evaluate all timelines and ensure they are adequate to get the job done – from how long it takes to get responses to how long it will take you to evaluate them.
Try to balance your needs with the reality of how long it takes to respond appropriately to an RFP. For example, if you care mainly about price, don’t ask hundreds of nice questions to know but don’t add value to your evaluation process, and the answer to which is likely to be formulaic and non-value-adding (ex: tell me your 5-year strategic plan). Buyers sometimes forget that every question asked requires the response to be evaluated, scored and ranked.
Be detailed without being prescriptive
Focusing on detailing your project goals instead of telling suppliers how to do the job will encourage respondents to freely use their expertise and insights in presenting their solutions. Suppliers are more likely to respond to RFPs that gives them room to be creative and suggest solutions.
Remember to ensure that you can still evaluate the responses relative to your needs. This is, after all, about what you want.
Be Transparent:
A great RFP should include as many details as possible to describe the requirement so that respondents don’t have to guess what you need or have to make lots of assumptions. By removing the guesswork, you allow suppliers to focus entirely on the solution – such as optimizing a budget range, satisfying both low and high-level requirements and so on.
RFP Is A Time-Consuming Process…
The better an RFP is, the better the proposal your suppliers can send to you. The best thing to remember is – if you can’t describe what you want, then there is a high likelihood your supplier cannot describe the solution in a way that will be acceptable to you. Up-front work that results in clear and concise requirements, timelines, expectations and evaluation criteria yields the most effective responses (assuming you engaged the right suppliers!)
One way to reduce the challenge is to use automation to eliminate the non-value-added effort and make sure the right suppliers are in your respondent pool.
Remember, the software can be your friend (finding potential bidders, distributing information and coordinating responses, receiving bids according to policy standards, etc.) and can also be your enemy (asking 100 boilerplate template questions when only ten would do the job). A judicious combination of planning and automation helps you achieve your goal – working with qualified suppliers at what you consider the best value.
In the SupplierGATEWAY Sourcing app, you can quickly post new opportunities to promptly find prospective suppliers that are likely to meet your needs. The easy-to-use Bid app accelerates and streamlines the process of engaging suppliers to request bids and quotes and manage responses, even for small projects. Also, The software enables you to schedule web meetings, conference calls, or even in-person meetings with selected suppliers – all in one place. If you’re interested, watch our demo and get started today for free.
Multi-Sourcing: Everything You Need To Know
The outsourcing model has been popular over the years as companies scale up and require specific supply needs to accommodate their growth. Yet, many companies have been questioning and doubting the effectiveness of having one provider meet their procurement objectives. Instead, they adopt a new approach by having multiple vendors involved, known as “multi-outsourcing.”
Increasingly, many businesses consider outsourcing as a part of their procurement strategy to maximize performance and gain a competitive advantage. This article will give you most of all necessary information that can enhance your understanding and whether multi-sourcing should be a part of your business strategy.
Definition
Before diving deeper into the topic, we should be clear about what outsourcing is. In simple words, outsourcing is the practice of obtaining goods and services from third-party suppliers. This is commonly used to reduce costs and add specific skill sets needed for a product or service without requiring substantial in-house investment to get something done quickly.
Multi-sourcing, also known as multiple sourcing, is an outsourcing approach in which products or services are contracted to various suppliers needed to conduct the business instead of using traditional single sourcing.
Is Multi-Sourcing A Good Strategy?
Leveraging multi-sourcing can create flexibility and mitigate the risks of causing supply chain disruptions from unexpected events such as natural disasters or the most recent coronavirus outbreak. On the other hand, working with multiple suppliers adds complexity to the supply chain, making it challenging to manage suppliers. To get a better understanding, here are some main pros and cons of multi-sourcing:
Pros:
Risk Deduction: Less reliance on any individual supplier increases the flexibility in the supply chain if something goes wrong.
Supply Chain Stability: reduce the significant risk across the products or services through supply chain diversification
High Product Quality: Get the highest product and service quality at the best possible price, thanks to a larger resource pool
Innovation: build innovation through competition
Negotiation: Be able to monitor which suppliers perform best, which helps you make a better deal in the future.
Cons:
Supplier Management: Difficult to build and maintain a good relationship with multiple suppliers simultaneously.
Administration costs: Potentially increase the management overhead costs associated with managing and communicating with numerous suppliers.
Quality Control: A challenge of keeping track of quality control and efficiency
Integrations Difficulties: When multiple suppliers take over different parts of a product, there will be an issue integrating them, resulting in additional costs and time.
Besides these main points, some external factors also influence whether you should adopt multi-sourcing. Smaller businesses tend to have less flexibility in choosing suppliers due to limited budgets and labor. Hence, the answer will depend on what particular project you are working on and your capabilities. Each factor will lead you in a different direction that is best in your current situation.
Supplier Lifecycle Management
As mentioned, there are still drawbacks of multi-sourcing besides many benefits. One of the biggest challenges is how to effectively manage the complexity of having multiple vendors. Manual workflows to manage suppliers no longer works in the multi-sourcing model. Instead, many businesses embracing multi-sourcing utilize the end-to-end process of supplier lifecycle management to ensure their operations run smoothly and more efficiently.
Here are the eight critical areas in most supplier management solutions.
Qualification: This is the first step of supplier management when making sure your suppliers meet your specific requirements or not. There are a hundred or thousands of suppliers participating in your program. Therefore, it’s essential to filter only the ones that satisfied your requirements.
Evaluation: After suppliers submit their application for the evaluation process, you will start evaluating those who passed the first step based on different criteria such as quality, supply risk, customer reviews, performance, diversity, etc. – whatever matters to you and your organization most will be considered in this stage.
Selection: After assessing all of the candidates, the number of qualified suppliers should be significantly narrowed down for you to make a decision. This selection process is crucial cause it directly impacts your business operations; hence, it takes time. The ultimate goal is to maximize the potential value and able to build a long-term relationship.
Onboarding: This step is all about collecting all the necessary information and documents that you need to get a supplier approved in your system. Once a supplier is approved, you can now see updates on supplier information and their performance.
Supplier Performance: Supplier performance management helps your company find out the problems early and solve them quickly. It’s essential to constantly monitor and value their performance to determine whether they follow the agreement’s terms.
Identifying Risk: the goal is to reduce risk as much as possible. Identifying risk will prevent unexpected events such as a breach of contract, late deliveries, low quality, etc. Risk management is critical and yet the most overlooked.
Supplier Development: Businesses with strong collaborative relationships with their suppliers are more likely to grow faster than those who aren’t. Regularly sending feedback to supplies will help improve the process and manufacturing capabilities.
Supplier Management: Cultivating a mutually beneficial relationship with your suppliers will give you a significant ROI and gain more competitive advantage and innovation, which results in reducing cost, lower risk and higher quality.
Solutions for Effective Multi-Sourcing: Automation Is A Future
Though it seems overwhelming, supplier lifecycle management is not impossible to reach. It has already been a critical part when it comes to business success. Having a clear and centralized view of your procurement and supply chain brings significant benefits to the performance. With automation, you can unlock the full potential of your current and future suppliers by utilizing robust software that allows you to do these 8 steps simultaneously with much less effort.
SupplierGATEWAY’s scalable, instant-on and robust software provides everything you need – the ultimate supplier management, procurement and supplier diversity solutions that help businesses of all sizes to manage their suppliers easily, quickly, effectively and at a low cost. We’re excited to tell you more. Contact us today!
4 Best Practices To Streamline Supplier Onboarding
Today, more and more companies, especially global ones, have grown their supply base exponentially, which makes the onboarding process more complex than ever. It is becoming common for large companies to have hundreds of thousands of suppliers. But establishing new supplier relationships and managing these new suppliers’ risk profiles can be a problem.
Despite these constraints, companies are also expected to gain a deeper understanding of supplier activities. The solution to these issues starts from picking the right suppliers to partner with and optimizing the onboarding process.
To effectively manage the process, an organization must master its risk assessment, due diligence and supplier relationship management (SRM), which can be difficult without proper tools and good business operations. The following four best practices are the answers you need to streamline and improve the process.
Mitigate Risk and Fraud From The Beginning:
Carefully assessing and prequalifying your potential suppliers is crucial to avoid any future risks and reduce fraud. To achieve that, having clear communication about your organization’s values and, in turn, if the supplier’s value aligns with yours is a must. You should also certify and verify all pieces of information – categories, insurance, financial information, sub-suppliers, and so on – provided by suppliers.
The SupplierGATEWAY supplier-prequalification app can configure supplier risk questionnaires, standardize workflows and automatically filter suppliers who don’t meet your minimum criteria. Furthermore, you can utilize our Financial Risk Monitoring app to proactively watch for bankruptcy filings, tax clients, late payments and collection fillings within your supply base.
Supplier Self-Service Portal:
As the number of suppliers increases, many organizations are under tremendous pressure to assist and work with suppliers without increasing their staff number. With a self-service portal, your suppliers don’t have to email directly to your team whenever they have a question or need additional information, which has often occurred to organizations managing it manually.
The SupplierGATEWAY self-service portal provides you all the necessary tools to ensure consistency in onboarding new suppliers, regardless of the specific category or the supplier sizes. We help you avoid all these troubles and save your time and money with a simple and efficient supplier-friendly portal.
Access to The Most Current, Relevant, Validated Information:
To save your time and efforts, collecting all relevant, completed and validated documents from suppliers is necessary. Not doing so can potentially interrupt and harm your business. Also, It’s time-consuming without the help of technology. In other words, we believe standardizing the implementation data is your hassle-free solution.
Fortunately, in the SupplierGATEWAY self-service portal, your suppliers can easily update their contact, company, certifications and product information at any time, which is a win-win for both parties to ensure everything is up-to-date.
Automate, Automate and Automate:
Innovations such as AI and automation are more evolving, particularly in business, in which many organizations have been utilizing technology to streamline their operations. Automation brings considerable benefits to your onboarding process, including greater efficiencies, configuring resources and users, fewer errors and tighter control over your SRM platform. Using automation is part of supplier onboarding best practices.
With more and more increasing problems coming from suppliers, the need for automation is expecting to be higher than ever. That’s a reason why the SupplierGATEWAY supplier management solutions are offered, which enhance your process to be more transparent, robust risk management and make better decisions.
Wrapping it up…
No matter what products or services you offer, it’s essential to build a good and strong business relationship with suppliers through supplier onboarding best practices. By doing so, you will positively impact your business’ success in the long run by increasing opportunities for smart and strategic sourcing. And we’re here to help you speed up building that stronger relationship. Schedule your demo today!
5 Things Most Buyers Carefully Consider When Choosing a Supplier
Great suppliers are essential to a successful business, which allows one to produce and deliver the best possible goods and services. However, finding the right suppliers can be tricky – after all, there are often many suppliers out there offering the same product, but not always with the same quality and consistency of service. Buyers are always looking for a reputable supplier with competitive pricing.
What is the right supplier?
The right supplier is a partner that provides the most suitable goods and services at the optimal prices in the right time frames requested by the buyer.
As a supplier, are you wondering what the most important factors are that buyers take into account when choosing a supplier? If so, you’re not alone! Here are four common things that buyers often consider when deciding to partner with a supplier:
1.Qualification Criteria:
Every business has its own requirements and standards for their suppliers. As a supplier, you should be aware of your potential customer’s standard criteria, including price, quality and delivery or service timeframes, before talking to them. Each buyer might also have special requirements such as minimum or maximum orders, payment methods, guarantees, etc.
Besides, some other less tangible criteria like efficiency, transparency, friendliness may decide whether your prospect will close the deal with your business. People always want to work with a motivated partner who can be relied on to get the job done.
Understanding all of it before submitting that bid will help you one step closer to the deal. Consider participating in buyer intelligence-gathering sessions, such as our QuickConnect Matchmaker feature – buyers use this as a way to understand the market better – you can use this as much valued one on one time with your future customer.
2.Experience in the market and current references:
Who were and are you working with? What did they say about you? Have you done any business with a partner in the same industry? Do you have any references that we can talk to? These factors are critical to determining whether your business is likely to bring the best value and lower risk to a buyer.
It’s not strange for a buyer to ask you all these questions because to them, choosing a supplier is like hiring a new recruit – they’re about to step into a long-term relationship with you. Therefore, it’s common for them to get an honest review of your past partnership, including good and bad points.
To make things a bit easier for buyers, who are always busy and looking for an easier way to get to the “shortlist,” your profile includes an SG score, a rating system that measures supplier performance, in our app. You should know your own score and take easy steps to maximize it. It makes you easier to find and may help you stand out above others.
3.Financial Security:
Buyer’s seldom want to work with a supplier who doesn’t have a strong enough cash flow to deliver what they want and when they need it. For their peace of mind and protecting a business, the vetting process is often a high priority task before considering other factors.
So how could a buyer assess your financial stability? This is a sensitive subject, especially with small or privately held companies. Diligent buyers gather and monitor critical financial information on suppliers such as suites, liens, judgments, and financial stability.
With that being said, as a supplier, you should know as much about how you look to prospective clients as they know about you. Proactively manage your business’ financial “face to the world” by monitoring your financial risk profile at least once per quarter.
4.Strong service and clear communication:
Over the years, the consequence of late orders, delivery delays or taking too much time to resolve an issue has impacted dramatically not only buyer’s expenses but also their customer retention. One study found that 69% of consumers “are much less or less likely to shop with a retailer in the future if an item they purchased is not delivered within two days of the date promised.”
Therefore, clear communication and quick responses are other factors that you, a supplier, need to remember while working with any buyers. The best suppliers actively ask for buyers’ needs and strive to understand how they can do the job better.
5.Location, Location, Location:
As you might know, for a variety of reasons, the local sourcing trend has been recently increasing and is becoming a new normal, especially during the COVID-19 pandemic. According to Thomasnet.com, 72 percent of industrial/B2B buyers “always or generally” prefer to source locally.
This creates an opportunity for you to expand your market presence with prospects who may formerly have been looking elsewhere. There are a few ways to facilitate “being found” – Make sure your profile is complete and up to date, take advantage of any stage you can stand on to elevate above your peers – for example, being an Amazon Business seller is one easy way to make it convenient for buyers to buy from you. Pay close attention to postings and bid opportunities nearby – you may have a built-in advantage. Make the best use of it!
About Us:
At SupplierGATEWAY, we offer a robust platform for suppliers where you can gain access to new business opportunities and connect with customers of all sizes – from Fortune 500 companies and globally recognized companies to your local health system, manufacturer or business. Our easy-to-use app will help you stay connected to the opportunities that could make all the difference to your bottom line.
It’s not an exaggeration to say suppliers are the center of the supply chain’s success. No matter what industry you’re in and the products you sell, you won’t accomplish much without collaboration with suppliers. 
Creating a Request for Proposal (RFP) is a crucial business practice that allows a company to identify and engage the right supplier to satisfy a requirement. A well-written RFP substantially increases your company’s chances of getting the services or products you need at a price that works for you. The ultimate goal is to ensure you’re working with qualified suppliers at what you consider the best value.
