If your organization orders parts on a daily basis, it is wise to make a thorough assessment of your suppliers. What should you pay attention to when selecting the right supplier?
Price and quality
As with any purchase, you want good quality at a low price. Fortunately, price is a perfect factor for comparisons between suppliers. With quality, this is much more difficult, although with some experience you will be able to estimate this fairly well per supplier and per product (category). It can be interesting to develop an interface between your ERP system and the supplier's system to have, for example, a price and availability check, or to be able to request a quote and place orders.
Delivery time and delivery reliability
Sometimes delivery time is crucial and sometimes totally irrelevant. If you need parts for an emergency repair, then you MUST have them delivered on time. If it is an order to replenish the stock, then there is much less urgency. So when assessing your suppliers, consider how quickly they can deliver. In addition to this delivery time, the delivery reliability is interesting. If one supplier promises to deliver within 24 hours and meets this 90% of the times, the supplier that delivers within 48 hours and meets 99% of the times may be a better alternative.
Many other factors play a less important role in supplier assessment, but they must certainly be included. Does the supplier take responsibility in the event of mistakes? What about communication? How are complaints being handled, or returning parts and what about handling warranty claims? Want you want from suppliers in general is a proactive attitude to help you as well as possible, to prevent mistakes and to strive for continuous improvement.
The benefits of selecting the best supplier per order
The most obvious advantage of a thorough supplier assessment is cost savings. By making a good comparison, you gain insight into the cheapest supplier per order. A second advantage is that by selecting the right suppliers you can shorten the delivery time and increase delivery reliability. Ultimately, that leads to higher customer satisfaction. Other major benefits are increased efficiency and increased flexibility within your organization by working with suppliers that are reliable and deliver quickly.
The right analysis tools
But how can you make sure you assess your parts suppliers in a correct and consistent way? For that you need good analysis tools. Make sure you have a perfect insight into your need for parts and the orders you place. With the right reports and analysis you can then see which products and product categories require extra attention in the field of supplier assessment. Only with a few simple measures can you immediately start saving costs.
Luuk Busschers is Consultant at Dysel and helps customers to achieve their goals by using industry-specific ERP software.