I’ve never heard the process of switching suppliers described as easy. People may say that it “went smoothly” or “could have gone worse,” but the reality is that it’s not easy. Because of this, many organizations delay the process and experience increased costs and consumer dissatisfaction as a result.
Questions to consider:
- Do you know how your suppliers are performing?
- Do you know how your suppliers should be performing?
- Are your suppliers adapting to growth?
Not all issues with suppliers are immediately obvious. If you’ve answered no to any of these questions, it’s likely you’re unable to determine if you should switch suppliers because you don’t have the data you need.
In general, organizations decide to switch suppliers for these reasons:
- The supplier is no longer reliable and communication efforts have failed. Symptoms include consistently late shipments, damaged goods, etc.
- The supplier is disengaged. They show a lack of interest and often fail to follow-up
- The supplier is not able to stay current in the market and is no longer competitive in price.
- The supplier is adding “extra-sale costs” such as rework to product, backorders, extra training, etc.
When deciding to pursue new or additional suppliers, consider the following:
- Know who your ideal supplier is. Profile the perfect partner.
- Develop a questionnaire to use when scouting.
- Use a 3rd party to conduct a supplier assessment (audit) on the top prospects.
- Use a non-biased quality tool such as a grid analysis to compare findings and make a decision.
- Learn from prior supplier relationships and carefully construct any new partnerships as to avoid future issues.
The right suppliers make a difference. It’s worth it to evaluate performance regularly and take appropriate actions to ensure strategic partnerships. Benefits include:
- Prevents issues with quality, communication, the buying process, etc.
- Higher likelihood that products consistently meet delivery expectations.
- Reduced costs over short and long-term.
- Increased operational efficiency. Drives supply chain excellence.
- An overall improvement in service and customer perception.