Supplier Selection Process

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Suppliers are an integral part of any business, especially manufacturing. Supplier selection is the process of finding the right supplier for your business. It encompasses all the steps taken to find, select, and work with a supplier. 

Supplier selection is an essential part of making your product successful. The key to selecting the best suppliers is understanding what you need from them.

Before choosing which suppliers to work with, there are many factors to consider. Here are some things you should think about when selecting suppliers:

* What are your end goals?

* Who will you be partnering with?

* How does this affect your supply chain?

* What do you need from the supplier?

* How can they help you achieve those needs?

* What kind of relationship do you want to build with the supplier?

* Are there any potential risks that could arise?

A well-designed supplier selection process will ensure the right products and services are delivered at the right price, on time, and according to specification.

What makes a good supplier?

A good supplier has the following qualities:

* Is reliable and trustworthy

* Can deliver quality products or services

* Can provide support if needed

* Will honor its commitments

* Offers competitive pricing

* Provides timely delivery

* Accepts returns without hassle

* Has a strong reputation

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  • Supplier Selection process

    1. Establish Requirements

    The first step in the supplier selection process is defining your requirements. This means understanding exactly what you need from your suppliers. You may have a general idea of what you need but not know how to get it.

    2. Establish Supplier Selection Criteria

    Once you've established your requirements, you'll need to decide on the criteria used to measure whether or not a supplier meets these requirements. These criteria must be clearly defined so that everyone involved in the selection process understands what they mean. For each selection criteria, establish the weightage as well.

    There are many different types of criteria used to select a supplier. These include price, quality, service, delivery, reputation, etc. Some companies will use all of these criteria, while others may only focus on one or two. It depends on what they want from their supplier.

    For example, suppose you're looking for a supplier who provides a quality product at the lowest price and faster delivery. In that case, you might use the following criteria as a basis for choosing a supplier:

    Price - 20%
    Quality - 20%
    Delivery - 20%
    Lead time - 10%
    Responsiveness - 10%
    Capability - 10%
    Capacity - 10%

    3. Identify Potential Suppliers

    After establishing your criteria, you'll need to start identifying potential suppliers. There are a few ways to go about doing this:

    a) By using existing networks - This should be the first choice. Check with your current suppliers if they can provide the specific product or service you are looking for.

    b) Online search - Use online sources such as Google, LinkedIn and social media sites to source potential suppliers.

    c) Trade shows/exhibitions - Attend trade shows and exhibitions where suppliers display their wares. Meet with prospective suppliers to discuss your needs.

    d) Referrals - Ask people you trust for recommendations. They may be able to introduce you to someone else who can assist you.

    e) Research - Conduct research on potential suppliers by reading reviews and testimonials posted online.

    f) Networking - Make contact with other companies in similar industries to see if they would recommend a particular company.

    g) Directories - Look at the trade directories available to find out if there are any suppliers in your area.


    4. Make a Short List of Suppliers

    Now that you've identified potential suppliers, make a shortlist based on the information gathered during your initial investigation. It's important to keep in mind that the purpose of this stage is to narrow down your options. Remember that the goal here is to eliminate all those options that will not work for you.


    5. Select Your Final Supplier

    The final step in the supplier selection process is selecting the best supplier. For supplier evaluation, you have several options available, depending on how much time you have available.

    a) Negotiate - Negotiation is the most common method of selecting a supplier. In this case, you meet with each supplier individually to negotiate terms.

    b) Request proposals - Require suppliers to submit written proposals detailing their capabilities and costs.

    c) Pre-qualification - Require suppliers to demonstrate their ability to perform before you commit to them. Typically suppliers are required to complete a pre-qualification questionnaire, which in some instances might be followed by an onsite audit by the buyer organization.

    d) Request for quotation (RFQ) - Require suppliers to quote prices for a given set of requirements. In addition, the supplier would be asked to provide details related to capability, capacity, third party certifications etc., as evidence of their ability to provide that product.

    Finally, selected suppliers are then included in the approved supplier list of the organization. 

    6. Monitor Performance

    Monitoring performance is essential throughout the entire supplier selection process. Monitoring ensures that you're getting what you paid for and that you're receiving the highest level of service possible.

    Certified Supplier Quality Professional (CSQP) Online Training

  • CSQP Exam Preparation Course
  • Certificate of Completion with PMI PDUs
  • 20+ hours of videos, slides & quizzes
  • Life-time access
  • 30 days money-back guarantee
  • Supplier Selection Process Tips

    For selecting a good supplier, there are so many factors to consider. You have to look at their performance history, their customer service record, price, delivery and more.

    Here are some tips on how to select a good supplier:

    1. Plan ahead - Before starting your supplier selection process, take the time to think about where you want to go and what you want to achieve. What do you hope to accomplish? Do you want to select a single supplier or multiple ones? How many suppliers will you require? Will you use a formalized process or rely on intuition? These questions will help guide you through the rest of the process.

    2. Look beyond price - When evaluating suppliers, don't just focus on cost alone. Take into account the type of services offered, the quality of the products, the delivery timescale, and the availability of spare parts.

    3. Consider the benefits - Think about the advantages and disadvantages of working with each supplier. Do they provide good customer support? Will they deliver quickly? Can they handle special requests?

    4. Use technology - Technology has made it easier than ever to find and contact potential suppliers. There are plenty of online tools available to assist you with your research.

    5. Be realistic - Don't expect to find everything you need from one supplier. You'll probably need to combine different types of products and/or services from various sources.

    6. Ask for references - Check out previous clients' experiences with the supplier. It's also worth asking if they can recommend other suppliers who may offer better benefits at lower price points.


    The supplier selection process is more than just a way for organizations to get the lowest priced products -- it's also an excellent tool for building strong working relationships with vendors. This key takeaway from this discussion is not relying solely on price but also considering other factors like quality, reliability, timeliness, flexibility, safety, ethical values and environmental impact.

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