A supplier is a third-party firm or individual that provides the materials, parts, supplies, services, and capital items for a company to produce its goods and services. Thus, the supplier plays a vital role in the ongoing health and progress of a business.
The role of a supplier is to provide a certain level of quality at an acceptable price. Suppliers are expected to comply with local laws, provide fair and equitable transactions for all their customers, and have no conflicts of interest.
How Does a Supplier Impact a Company?
A supplier impacts a company in these ways:
Timely deliveries, enabling the company to provide its goods and services to its customers in a reliable way, both as to quality and time.
Being competitive, based on pricing, quality, and reliability.
Innovation, contributing to the progress of a company and its needs.
Finance, enabling a company to move its business forward.
How to Choose the Right Supplier for Your Business
Choosing the right supplier for your business should be a strategic decision, based on the right match of the supplier to your business and how they will fit with your business. Part of the right fit is the size of the supplier, relative to your business.
The selection steps involve:
Setting the selection criteria. That includes the factors of ideal lead time, minimum and maximum order quantity, quality assurance practices, payment terms and conditions, return policy, and communication standards. You will want a supplier that is reliable, offers strong service and clear communication, provides financial security, and that utilizes a partnership approach.
Identify potential suppliers and examine them based on their reputation, service capabilities, and security.
Evaluate the bid submissions. Which supplier will best meet quality, budget, service, and timing needs?
Continue to monitor supplier performance.
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