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Key aspect to consider

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Key aspect to consider

The "name of the game", as far as supplies are concerned, is acquiring them in the right quantity, at the right quality, at the right cost and at the right time and place. Here are a few factors and steps to consider in choosing the right supplier:

  1. Find out about the company
    Go, first for thinking those providers are closer to their needs. Then consider some essential aspects of their candidates who are they? How structured? What are the rates for its products and payment terms? Do you have the resources necessary to provide effective?
     
  2. Get references
    A serious and responsible supplier will have no problem in delivering customer information. It is essential to analyze who they are and what their level of satisfaction with services and products delivered by the company, as well as timeliness of delivery, and advances in technology used, among other things. Does your provider have a good reputation among its customers?
     
  3. Put to the test
    The best reference of its potential supplier will be to test it. During the process, you can see if they have effective communication channels (both during the stages of order as in the sale, delivery and after sales of the product) if they meet agreed deadlines, if the products arrive in good condition, etc. A good provider will necessarily have tracking system products.
     
  4. Put emphasis in the value they deliver for your money
    It is no use having a good price if supplies are of poor quality. The same her meet agreed deadlines, but the products do not arrive in good condition. Is it acceptable or not the delivery time and prices offered?
     
  5. Have more than one supplier
    It is recommended not putting all your eggs in one basket. If the raw material offered by the supplier is critical to your business, not dependent on one supplier. This, as in case of increased demand, your provider may not meet the expected amount or the terms agreed.

And additional strategies:

  • Try to avoid over-dependence on one supplier. This means that if one supplier lets you down you have a back up that you can use so that there is no disruption to the service you are offering.
  • Promote competition among suppliers for your business. You may wish to create a tendering process to achieve the lowest price.
  • Promote closer cooperation with all of your key suppliers. For instance, you may decide to pay a higher premium for specific assurances.
  • Take advantage of quantity discounts. Approach your potential suppliers and ask them if you buy X quantity of their product what discount will they give you.
  • Obtain supplies from different parts of the world to reduce the effect of potential political instability or stricter government laws in certain countries that you may have dealings with.
  • Carry large stocks. For instance, if you are concerned that a certain component or raw material is going to increase price considerably in the short term, you may want to buy more of that resource now and stock pile it so as to reduce the negative effects on your profit. However, this should be balanced carefully to ensure it does not have a detrimental effect on your cash flow.
 
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