Sourcing Supplies

Sourcing Supplies

Identifying Potential Suppliers

  • Initiating the sourcing process involves identifying potential suppliers. Businesses can find suppliers by conducting market research, attending trade fairs, using online directories, or getting referrals.
  • Businesses should consider a range of factors when selecting suppliers, including price, quality, the supplier’s reliability, and their capacity to deliver on time.

Evaluating Suppliers

  • Part of the sourcing process is to evaluate potential suppliers. This can involve investigating and comparing suppliers’ pricing, quality, reliability, and delivery times.
  • Some businesses may use a Supplier Appraisal system to quantify and compare different suppliers. This involves awarding points based on key factors like quality and reliability.

Procurement Methods

  • There are several different procurement methods a business may consider. This can include buying goods outright, renting or leasing, or possibly partnering with the supplier in a joint venture.
  • A business should decide on the best method based on the nature and scale of their operations, the level of risk involved, and their financial capabilities.

Forming Supplier Relationships

  • Once a supplier has been chosen, a business will need to establish a supplier relationship. This can include negotiating terms and conditions, pricing, and delivery schedules.
  • Maintaining good relationships with suppliers is crucial for ensuring a stable supply chain, which can help a business meet its customers’ requirements effectively and efficiently.

Reviewing Supplier Performance

  • After a supplier has been sourced, their performance should be regularly reviewed. This can help a business ensure it is still getting the best value for money and service.
  • Businesses can use key performance indicators, or KPIs, to measure supplier performance. Regular supplier reviews can also help to strengthen the relationship between the business and the supplier and identify areas for improvement.

By mastering these key aspects of sourcing, a business can establish a strong supply chain that supports its operations and future growth successfully.