Make sure the supplier can deliver

When selecting the supplier we need to have confidence that they will deliver our needs and comply with our values.

When evaluating potential suppliers, whether consciously or subconsciously, we develop a number of characteristics that we want our supplier to have. These characteristics will often emerge from our understanding of the advantages and disadvantages associated with different suppliers or segments of the supply market the buying approach that we have decided to adopt. Some of the key characteristics that we may assess upon are the suppliers performance

• in terms of total cost of ownership, quality, delivery, flexibility, responsiveness
• their willingness to enter into the type of relationship that we require
• their values and CSR
• their potential to improve
• their potential to meet our future needs
• value added services, and
• their potential to improve

Given the characteristics that we are looking for we also need to understand their relative importance. Even as consumers we buy the same items from different suppliers depending upon or needs. For example we might do a weekly shop at a supermarket or online, which includes our milk. However if we unexpectedly run short during the week we might rather use our local store because it is quicker. Similarly in business we might purchase bulk or regular orders from one supplier where there is a one week lead time but in an emergency buy from one which for instance, might be more expensive but can react immediately and perhaps stem much larger losses created by the emergency. It is important to recognise that the structure of these businesses are likely to be very different and in making our assessment and selection of the most appropriate supplier these differences should be reflected in our selection criteria (characteristics)

In a commercial purchase, especially in strategic relationships, confidence in the potential suppliers’ ability is normally gained through conducting an audit to quality assure the suppliers’ processes, systems, culture and values. These audits can be very detailed and costly to the buying organisation as they can involve a buyer team for some days.

In extreme cases these audits and responsibilities can lead to unfortunate events. In 2016 an Indian restaurant owner was accused of killing customer. It turns out the meal was served containing a potentially lethal peanut powder which, to someone with a nut allergy, could and did have fatal consequences. Read the article and think about the following question.

Talking point

• As a consumer how can we check that a potential supplier will deliver to our needs and values?