How to choose a supplier

How to choose a supplier

The right choice of supplier is one of the key factors for successful business. It is from suppliers that the uninterrupted supply of the necessary raw materials and materials depends.

How to choose a supplier
To select a supplier, there are a number of well-developed techniques. Which of them to choose companies, it is necessary to decide on their own.

Method of rating evaluations

The method of rating evaluations is the mostpopular when choosing a supplier. The analysis is carried out in several stages. Initially, it is necessary to develop a list of criteria for selecting a supplier, and then determine the specific weight (significance) of each of them on a ten-point scale. The criteria can be price, reliability, quality of goods, granting a deferred payment, the ability to supply large quantities of goods, the financial condition of suppliers. The criteria depend on the type of goods. In the conditions of unification of qualitative characteristics of the goods, the price parameters come to the fore, while uniqueness and exclusivity - reliability and security of supply. Further, each supplier is given scores on a ten-point scale for each parameter. Then they are multiplied by the specific weight and summed. The final score for the company is obtained. Such operations are performed with each applicant for the role of supplier. Based on the points received, the most optimal partner is chosen. This method only from the outside seems to be extremely simple. In practice, serious difficulties arise that are associated with a lack of information for setting objective assessments. Also, the conditions of work declared by the suppliers may differ from the actual state of affairs.

Method of estimating costs

By this method, the supplier is selected, ywhose purchase of goods (raw materials) is associated with the least cost and is the most profitable. For each supplier, all possible costs and revenues are analyzed. This, for example, transport, marketing, insurance costs, etc. At the same time, logistics risks are taken into account. You can say that costing is one of the types of ranking method. Only here the price criteria are analyzed more deeply.

Method of dominant characteristics

In this case, the basis is nota multifactor model for the analysis of criteria, but only one criterion is taken into account. This can be price, schedule of deliveries, etc. This method is simplified as much as possible, but ignores other factors of selection. Also, some analysts focus on informal evaluation of suppliers and the importance of personal contacts. Such an assessment of communications with the supplier can not be ignored in the selection procedure.