Opting for a good supplier is essential for thriving businesses. The supplier of your choice drives considerable influence over your business's effectiveness, product or service quality, and overarching customer satisfaction. Here we will explore the attributes of what makes a 'good' supplier and highlight the pivotal importance of making the right selection for your business.
Why is choosing the right supplier so important?
Selecting the right supplier is not just about cost-efficiency. A poor supplier selection can lead to a lot of problems such as poor-quality goods, delayed deliveries, and even legal issues. According to market research, poor supplier performance can negatively impact your success, as suppliers should ideally work with you to increase your business's opportunities for success. Poor supplier data can lead to severe business consequences including wasted time and resources.
Essential qualities of a 'good' supplier
Let’s explore the qualities that you should be looking for to find a ‘good’ supplier for your business:
Accountability for quality issues
Accountability for quality issues is a crucial aspect of a supplier's role. This implies that in instances where concerns emerge related to the qualities of products or services, a reputable supplier doesn't evade accountability. They recognise the direct influence of such matters on their own standing and that of their clients. A good supplier will be dedicated to promptly and effectively resolving these matters to uphold their commitment to excellence.
A good supplier conducts thorough investigations into all problems. The aim is to pinpoint the source of the issue and to implement suitable measures to correct the problem. Upon identifying the root cause, they carry out resolution strategies and maintain clear communication with clients for transparency and trust rebuilding.
On the other hand, a bad supplier often exhibits opposite behaviours. They might deny responsibility for quality issues or fail to address them adequately. Their operations could lack transparency, leaving their clients uninformed about ongoing developments. Responses to complaints might be sluggish, indicating a lack of urgency and dedication to customer support. Moreover, the failure or inability to learn from errors could result in the persistence of poor-quality concerns. These traits not only harm their reputation but can also damage their clients' businesses. I It's essential to choose suppliers who demonstrate accountability and a commitment to quality.
Compliance with industry standards
Suppliers aligning with industry standards and regulations assure the dependability and safety of their offerings. Their dedication to upholding elevated benchmarks and consistently fulfilling regulatory criteria makes them a trustworthy partner of choice. Adherence to these compliance standards provides assurance that supplier products and services are not only secure for utilisation but also align with their customers' anticipations.
However, not all suppliers live up to these standards. Some suppliers neglect these industry standards and regulatory requirements, leading to subpar products or services that could potentially pose risks to the end-users. They may lack transparency about their compliance status or might be unaware of the latest updates to the regulations and standards.
Proactive and effective communication
Suppliers should be able to communicate any changes or disruptions in the supply chain effectively and promptly. Good communication helps avoid misunderstandings, ensures smooth operations, and builds trust between your business and the supplier.
It ensures smooth operations by keeping all parties informed about each step of the process. Clear and timely communication builds trust between your business and the supplier, creating a strong foundation for a successful long-term partnership.
In the context of a pandemic or similar crisis, proactive supplier communication becomes even more critical to navigate massive disruptions and ensure the survival of suppliers.
Demonstrates innovation
Suppliers who strive for continuous improvement and innovation can provide competitive advantages. They stay up to date with industry trends and technological advancements, which can offer your business a cutting edge in the market.
However, not all suppliers prioritise innovation. Many suppliers resist change and stick with outdated products, technologies, or processes, even when they prove to no longer deliver optimal results. They lack the curiosity to explore new ideas or the willingness to invest in research and development. Such suppliers can become a liability, as they may fail to meet evolving customer expectations or keep pace with competitors.
In contrast, innovative suppliers can be valuable partners. They can help businesses adapt to changes in the market, meet customer demands more effectively, and maintain a competitive edge. Therefore, when selecting a supplier, consider their commitment to innovation alongside factors like cost, quality, and reliability.
Offers good value
A good supplier offers competitive pricing and quality, ensuring good value for money. They understand that providing good value goes beyond just cost but also includes factors like service, reliability, and partnership.
On the other hand, a bad supplier might focus solely on cost, often at the expense of quality. They may offer low prices but fail to meet quality standards, leading to subpar products that can damage your business reputation.
Such suppliers may also provide poor customer service, failing to communicate effectively or resolve issues promptly. They may not be reliable, causing delays in delivery or inconsistencies in product quality. Additionally, these suppliers may view their relationship with clients purely in transactional terms, lacking the commitment and collaboration that characterises a true partnership.
Financial stability
Suppliers with good financial standing are less likely to face disruptions in their service. They can invest in technology, personnel, and infrastructure to improve their service delivery, making them more reliable partners in the long run.
On the other hand, suppliers with poor financial health pose a significant risk. A financially unstable supplier might struggle to maintain consistent quality, meet delivery deadlines, or honour contractual obligations due to limited resources. Likewise, their capacity to enhance services or respond to market shifts might be limited, eventually affecting their capability to fulfil your requirements.
Furthermore, should a supplier confront significant financial challenges, there's a potential risk of business closure, which requires you to quickly seek alternative sources. This could lead to expensive setbacks and operational disturbances. Evaluating a supplier's financial solidity is crucial prior to establishing a business relationship.
Overcoming challenges in supplier selection
The risks associated with poor supplier selection can be mitigated by conducting thorough research on potential suppliers, including their financial stability, track record, and reputation in the industry. Businesses can also use procurement risk management strategies to navigate these challenges effectively.
To sum up, a 'good' supplier extends beyond mere vendor status; they evolve into a strategic ally working alongside your business. Understanding and acknowledging the attributes of such a supplier empowers businesses to make informed choices and cultivate productive, enduring supplier relationships.
If you would like to learn more about the importance of building good relationships with your suppliers for your organisation, do check out The growing importance of customer centricity in procurement | Advanced (oneadvanced.com).