Systems for Supplier Selection, Ordering and Payment

Systems for Supplier Selection

Tendering process: This involves inviting suppliers to submit bids for a contract. The best candidate might not always be the cheapest but could offer the best value for money considering all factors.
Past Performance Evaluation: Reviewing how suppliers performed in the past can be a good indicator of what you could expect from them. Look at reliability, quality, and cost-effectiveness.
Reference Checks: Some suppliers might offer great promises, but it’s crucial to check their references to hear about their track record with other clients.

Criteria for Supplier Selection

Financial Stability: The supplier should be financially stable to ensure they’re able to fulfil their commitments.
Quality Cobtrols: They need to maintain high-quality standards for their products or services so that your quality isn’t compromised.
Reliability: The supplier must deliver on time, every time.
Location: Suppliers closer to your business are less likely to face delivery time and cost issues.

Supplier Ordering Systems

Electronic Data Interchange (EDI): This system enables businesses to send and receive orders and other business documents electronically, making the process more efficient and reliable.
E-Procurement: This involves purchasing through web-based and automated systems, which can significantly improve efficiency and reduce costs.
Inventory Management Systems: These keep track of stock levels and forecast demand, helping you determine when to place orders to suppliers.

Payment Systems for Suppliers

Bank Transfers: The most common payment method where money is sent directly from your account to the supplier’s account.
Credit Cards: Faster and efficient but usually accompanies a transaction fee.
Cheques: Traditional method but increasingly becoming unpopular due to delay in payment.
Direct Debit: Allows the supplier to collect payment directly from your account once authorization has been granted. Useful for regular transactions.

Remember, creating an efficient supplier selection, ordering, and payment system can streamline your procurement processes, reduce costs, improve supplier relationships, and ultimately boost your business performance.