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Supplier Selection and Contract Negotiation

 

Choosing the right supplier involves much more than scanning a series of price lists. Your choice will depend on a wide range of factors such as value for money, quality, reliability and service. How you weigh up the importance of these different factors will be based on your business' priorities and strategy.

 

A strategic approach to choosing suppliers can also help you to understand how your own potential customers weigh up their purchasing decisions. Future4 can offer services to help with supplier selection and contract negotiation.

Working with this step-by step approach Future4 can help you make the right choices. It will help you decide what you need in a supplier, identify potential suppliers and choose your supplier.

 

• Thinking strategically when selecting suppliers

• What you should look for in a supplier

• Identifying potential suppliers

• Drawing up a shortlist of suppliers

• Choosing a supplier

• Getting the right supplier for your business

 

Strategic Thinking

The most effective suppliers are those who offer products or services that match or exceed the needs of your business. So when you are looking for suppliers, it's best to be sure of what your business needs are and what you want to achieve by buying, rather than simply paying for what suppliers want to sell you.

 

It's well worth examining how many suppliers you really need. Buying from a carefully targeted group could have a number of benefits:

 

• It will be easier to control your suppliers

• Your business will become more important to them

• You may be able to make deals that give you an extra competitive advantage

 

Equally, it's important to have a choice of sources. Buying from only one supplier can be dangerous - where do you go if they let you down, or even go out of business?

 

What to Look For

 

Reliability; Remember - if they let you down, you may let your customer down.

Quality; The quality of your supplies needs to be consistent - your customers associate poor quality with you, not your suppliers.

Value for money; The lowest price is not always the best value for money. Striking the balance between cost, reliability, quality and service.

Strong service and clear communication; Suppliers need to deliver on time, or to be honest and give you plenty of warning if they can't.

The best suppliers will want to talk with you regularly to find out what needs you have and how they can serve you better.

Financial security; It's always worth making sure your supplier has sufficiently strong cash flow to deliver what you want, when you need it.

A partnership approach; Collaborative relationships are vital and will benefit both sides. You want your suppliers to acknowledge how important your business is to them, so they make every effort to provide the best service possible.

 

How to Find One

Future4 can help you find suppliers through a variety of channels, helping you build a shortlist through a combination of sources that will give you a broader base to choose from.

Areas of research include but are not exhaustive to;

 

• Recommendations.

• Directories

• Trade associations

• Business advisors

• Trade Shows/Exhibitions

• Trade press

• Competitor Analysis

 

​Supplier selection needn’t be drawn-out or painful, this simple framework will help support your business in identifying the need, the solution and the supplier – all at the right cost and service levels you expect.