Communication is one vital consideration when choosing suppliers. Will you be able to communicate well with them? Do they listen and understand the problem you describe, or do they formulate a solution before you have completely explained? Does the supplier make an effort to communicate on a level you can understand? If you have difficulty relating to your supplier, you will not be able to communicate all of the relevant details needed to maintain a successful operation.
It is often said, "The supplier needs to be involved up front." What does this really mean and how do you do it? Before committing to them, try reaching them by phone, fax and e-mail. A responsive supplier will quickly develop strong communication ties and understand your objectives.
Another important factor is the physical distance between you and your suppliers. They should be no more than a few hours drive away. More frequent in-person communication provides a better understanding of the details, data and information. The ideal situation is to have the supplier in-house.
Working a couple of days a week or more, the supplier can take charge of inventories, lead improvement teams and provide other valuable services. They also can stay informed about problems and upcoming projects. Technology, such as video conferencing and digital cameras, can help overcome a distance barrier; however, it is not as effective as in-person communication.
Trust, honesty and integrity are powerful assets for a supplier. They are shown over time, so it is difficult for a company to evaluate them in an interview. A good solution is to ask for references, particularly ones with working relationships of five years or longer. Ask for contacts who deal directly with the suppliers, and speak to their supervisors to confirm their performance. Ask about their ability to meet project dates and budgets, and ask for specific instances of trust, honesty and integrity.
You may also want to have suppliers tell you about a mistake they made. See if they take ownership of the error or try to place blame on others. Taking responsibility is very difficult, and admitting a mistake may reveal a lot about a person's character. Also, ask around the industry and see what the buzz is; most likely you will be able to hear the good, bad or ugly about suppliers.
Customer focus, attitude and energy are also key requirements for a supplier. Is the supplier adequately staffed to meet your needs? Does the supplier have the attention to detail and the drive to meet your company's expectations? Is the supplier positive about a complex, stressful situation that seems to need a miracle to succeed? Can the supplier take action without being instructed to do so? Does the supplier create such complete value in their services that they cannot be replaced? Overall attitude and energy level are very important.
Obviously, technical expertise is critical. Carefully review the tools the supplier has to offer. Look at demonstrated statistical process control, scrap issues, parts-per-million quality, on-time completion and downtime. Review employee history issues such as turnover rates, average time on the job and years of experience.
Consider a trial run/order to evaluate the quality and timing of the supplier. Review the supplier's commitment to research and working with new technology. They may be able to provide new ideas that will give you a competitive edge.
During the evaluation process, a company must compare suppliers with an open mind, free of preconceptions. Be honest when evaluating the current suppliers and keep the lines of communication open. Provide feedback about items meeting/exceeding your expectations as well as the disappointments/failures encountered.
Finally, don't settle for the status quo when exceptional suppliers are out there. Forming a solid supplier base is well worth the effort.
