Tag Archives: supplier selection

The Secret of Successful Supplier Selection

Still using cost as a primary criteria for supplier selection? Our latest webinar shares all the secrets you need for success.

Have you been tasked with running a selection process for a new supplier but don’t know where to start?  Perhaps you’ve been using the same routine for years but feel it’s time to freshen it up?  Are the old ways just not delivering the outcomes you need?

In our recent Procurious-Ivalua Webinar, Critical Success Factors for Supplier Selection, our panel of experts revealed the secrets to how they get the outcomes they want from their sourcing processes. 

Here are five great take-aways from that discussion.

Supplier Selection – Get the Balance Right

Our panel reported that many organisations are not yet on a path that leads away a cost-driven focus.  Tech tools that are available to help with future cost modelling mean procurement can go to the market with uncertainty about this type of risk reduced.  When cost risk is managed this leaves the way clear for the road to value. 

A great example quoted in the discussion was a utility contract. The focus was on value rather than cost. It led to costs being reduced and also meant a more sustainable outcome was delivered. This lowered usage and introduced measures to promote sustainability. 

Can you introduce a selection process that balances cost, value and your organisation’s wider sustainability goals to select a supplier who is right for you?

Remember, One Size Doesn’t Fit All

Making sure a supplier is a good cultural fit for the organisation is a key requirement that all our panel members stressed.  Think about the impact of a cultural misalignment on your organisation’s reputation or brand.  

Cultures vary across the world and getting a cultural fit when you’ve got a global supply chain is hard. However, there are many things on which the buyer and supplier can agree. How about meeting with your supplier’s leadership team as part of the sourcing process? This would allow you to assess their management ethos to make sure that the cultural fit is there right from the start?

The unknown unknowns

Managing external factors and risks, particularly those that are not yet known, are something that supplier selection process is often expected to address.  All panel members reported the challenge of grappling with the unknown unknowns in the current period of global upheaval and change. 

The advent of technology-driven real time data is something panel members welcomed to manage supplier and supply chain risk.  It’s also a great way to check and monitor supplier financial health. 

Make use of the new tools that are available to ensure your organisation is prepared and have a backstop position to allow a response when situational or supplier risks change.

Be a customer of choice

When it came to the supplier-buyer relationship our panel had very clear advice.  Whether we’re a supplier or a buyer, we’re all looking of a return on the investment in the relationship we’re about to have.  Focus clearly on the outcomes both sides are trying to achieve. 

Make sure you put yourself in the seat of your supplier’s sales director – how can a contract with your organisation provide a supplier with the opportunity for fair value earnings or a sustainable revenue stream?

Start the conversation

Changing the way your organisation selects suppliers will not happen overnight.  When you’re engaging with stakeholders our panel advises you to talk in their terms not the language of procurement. 

Will the change you’re proposing add value?  Why will it improve customer experience?  Why could it safeguard or improve reputation?

So, go ahead and pick one of the secrets that the webinar panel shared as being critical factors for success and start that conversation with the business today.

A recording of the Procurious-Ivalua Webinar – Critical Success Factors for Selecting Your Suppliers with panel members Gordon Tytler, Rolls Royce, Stephen Carter, Ivalua, Fred Nijffels, Accenture and host Tania Seary, Procurious is available here.

Critical Factors for Selecting your Suppliers

What critical factors do you look for in your suppliers? What does an organisation have to offer to get their foot in your door?

When you think of procurement, and get beyond the savings agenda, then the first thing that comes to mind is managing suppliers. While employees may be the life-blood of an organisation, suppliers are definitely the nourishment and support that keep organisations alive.

Without suppliers and their extended supply chains, organisations wouldn’t have any raw materials to make into products, any products to sell, or anyone to deliver much-needed services. That’s why a good supplier relationship (or relationships) can be critical to your daily operations.

However, one bad apple, one flawed contractors could not only stop the seamless functioning of your supply chain. It could also harm those two vital elements for all businesses – trust and reputation.

Your Critical Factors

If supplier relationships are key, then surely procurement should be taking its time selecting the right ones. And given the importance of this, procurement also needs to be applying the right ‘critical factors’ when selecting their suppliers.

As has been discussed in the past on Procurious, there are a number of factors that must be considered when selecting suppliers. The only issue is that these don’t appear to have changed very much over the years, begging the question – is procurement doing everything it can to adapt these criteria in line with the external environment?

Sure, it’s high time that procurement was looking past the traditional criteria of cost and quality when making their assessments. But the truth is, there’s no getting away from them.

However, this isn’t necessarily a bad thing if they aren’t the only factors in the equation. As procurement professionals, you are probably only too aware of the myriad of other factors that you need to be accounting for, from cultural fit and financial stability, all the way through to ethics and sustainability.

So which are the critical factors that procurement should be using? Is there a list that we should all be looking at?

Join our Webinar

Help is at hand in the form of Procurious and Ivalua’s latest webinar, ‘Critical Factors for Selecting your Suppliers’.

Sign up now to join our panel of experts at 11am (BST) on Tuesday the 3rd of September:

  • Tania Seary, Founder, Procurious
  • Stephen Carter, Senior Marketing Manager, Ivalua
  • Fred Nijffels, Accenture Operations ANZ – Procurement & Supply Chain
  • Gordon Tytler, Director of Procurement, Rolls Royce

In the webinar, you’ll hear from a panel of experts on a range of topics including:

  • The importance of cultural fit in your supplier relationships;
  • If sustainability, social value and fair working practices are becoming more prominent for procurement;
  • What your suppliers are looking for in your organisation; and
  • How to start the conversation in your organisation to move away from just cost and quality criteria.

FAQs

Is the Critical Factors webinar available to anyone?

Absolutely! Anyone & everyone can register for the webinar and it won’t cost you a penny to do so. Simply sign up here.

How do I listen to the Critical Factors webinar?

Simply sign up here and you’ll be able to listen to the on-demand. 

Help – I can’t make it to the live-stream of the webinar!

No problem! If you can’t make the live-stream you can catch up whenever it suits you. We’ll be making it available on Procurious soon after the event (and will be sure to send you a link) so you can listen at your leisure!

Can I ask the speakers a question during the Critical Factors For Selecting Your Suppliers webinar?

If you’d like to ask one of our speakers a question please submit it via the Discussion Board on Procurious and we’ll do our very best to ensure it gets answered for you.

Don’t Miss Out!

This webinar promises to provide a fascinating insight for all procurement professionals into the Critical Factors you should be considering in supplier selection.

Make sure you don’t miss out by signing up today!

Why Supplier Discovery Must Become a More Agile Process

In order for procurement to remain strategic, manually intensive processes, such as supplier discovery, need to become more agile and intuitive.

Doesn’t it seem like procurement reaches a new strategic milestone every day? These are amazing times to work in this field. We’ve been pushing towards this point for so long! Now that we’re here, we need to make sure we keep up the momentum.

None of procurement’s less strategic work is going away anytime soon, so if we’re going to avoid being dragged back down, we need to look for opportunities to streamline our processes. Anything that takes procurement away from working with suppliers and stakeholders should be a prime target for change.

Streamlining Supplier Discovery

One of those processes – supplier discovery – is long overdue for a makeover. Given today’s time constraints and better places to invest effort, there is no reason for procurement to be limiting the potential of a sourcing project by web-surfing to find prospective suppliers.

As Chris Silva, former Senior Director of Sourcing & Procurement at Synageva BioPharma Corp., recently told us, “Initial due diligence varies significantly from hours to months, depending upon many factors including data availability on the supplier, the supplier’s availability and response, the availability/completeness of third party data, and the complexity and completeness of the requirements, to name a few.”

Not only is the process inefficient for the reasons Chris points out, there is not really a good way to know if you’re missing a prime supplier candidate. The Internet doesn’t usually reflect the perspectives and opinions of your colleagues, and despite how popular online reviews and feedback are for consumer purchases, they just haven’t caught on in the B2B world.

Teresa Fiore, Associate Director of Global Sourcing for Marketing and Sales at Boehringer Ingelheim USA Corporation, pointed out the need to synthesise multiple sources of information, saying that finding new suppliers is “a combination of our internal sourcing knowledge combined with our internal marketing clients’ knowledge.”

Pulling relevant information from these multiple sources without adding time to the process is the first challenge to be addressed when streamlining supplier discovery.

Supplier Discovery – The Real Story

In November, ProcureCon surveyed 40 procurement execs like Chris and Teresa to find out what they really think of supplier discovery. The results tell an interesting story about the role of knowledge management in procurement today:

  • 83 per cent of searches take one to six weeks (or more) to identify the right suppliers and contact information prior to running an RFP.
  • 78 per cent of respondents share supplier information with their internal partners in person, and 70 per cent share through email. Only 25 per cent said they use online portals.
  • 70 per cent of procurement and sourcing professionals report that the most credible source of supplier intelligence comes from their internal peers.
  • 62 per cent of the respondents indicated they have little satisfaction with the technology solutions they use to gather supplier information and manage category intelligence today.

Clearly, there are real challenges around finding suppliers and then managing the organisation’s knowledge about them. One to six weeks to identify qualified suppliers? That hardly meshes with procurement’s agile, responsive new brand.

If you can go to Procurious and search their members for skills and sharing activity, why shouldn’t the same be possible on the supplier side? It’s not as if the technology doesn’t exist. We just have to prioritise supplier discovery and knowledge management so that they get fixed – fast.

If you’re interested in learning more about the research, including quotes from follow up interviews done with industry leaders, click here to download and read the whitepaper: Improving Strategic Supplier Discovery Through Technology.

Stephany Lapierre is Founder and CEO at tealbook, intuitive platform that mutually benefits companies and their supply partners by improving access to instant and trusted supplier intelligence, discovery, and identification.