Supplier selection process part 2 - how to select global supplier for your business

• Reliability - ability of this supplier to meet commitments and be trustworthy in the day-to-day activities.  When you are at a point of looking at new supplier your only way to make a judgment about reliability is by gathering references from this supplier that meet your own expectations.

• Financial Stability - if a supplier cannot meet obligations due to financial problems, your own reputation with customers may suffer. There are agencies that can help you investigate supplier credit history. You can also run supplier verification report to see if this company is a real business.
 
• Quality and Continuous Improvement - ultimately the quality of your product is directly impacted by the level of product quality provided by your suppliers. Given the variety of product offerings on the market, this parameter is relative to your own quality standards. You can start by ordering a sample from a supplier in question. But your much better option is to order a factory audit or product inspection service.

• Competitive Pricing - pricing of products or services when compared with other potential suppliers. You might not have enough information about other suppliers but you can certainly review several options using supplier directories or by working with sourcing agents with full representation of local suppliers.

• On-time delivery - ranks the supplier’s ability to deliver goods on time. This information is not available through negotiations and can only be received via reference checks. You should be well aware of the impact this can have on your business and the total cost of ownership.

• Customer Service and Communication - level of customer service and ongoing communication with this supplier. This is something you can make a judgment call about in the initial stages of communication.  People you communicate with during the initial engagement are typically either from sales or represent the owners. If you have any issues in the beginning, you are most likely to have issues with this supplier in the longer term. 

• Informative and functional Website. Many smaller companies do not have a well run website. This will impact you going forward because it has direct connection with your ability to see your orders being processed. It becomes especially important when working with suppliers from other countries.

• Approach to Partnership. Get a sense how much your goals are in line with the goals of this supplier. If you think of making this relationship last, you need to evaluate the importance of your business to this supplier. Don’t expect to get preferential treatment if all you are looking for is one order. Be ready to discuss your goals and get a sense of the same from this supplier.

• Environmental record and Corporate Social Responsibility of your suppliers are two important factors for your own reputation. However, these are hard to assess without actual site visits. We recommend you use services such as supplier inspections and social audits to understand this part of your supplier’s business.