Wanted: A Few (or Several) Good Suppliers
Now that your holiday shopping is behind you for another year, it might be time to turn your attention to shopping for something entirely different: new suppliers. If so, you are not alone.
“What I’m observing as part of the COVID reaction is businesses are re-evaluating those really important items, those things that will make or break me from a supply shock standpoint,” said Peter Bolstorff, executive vice president of corporate development at the Association for Supply Chain Management. “They’re focusing on ‘how do I develop better strategic relationships with a more diverse set of [suppliers]?’”
Bolstorff is quoted in a new blog from Oracle NetSuite that addresses “How to Find the Right Suppliers … and Manage Your Increasingly Intricate Supply Chain.” As you know better than anyone, this exercise is quite a bit more complicated than ordering Christmas presents online and then picking up your package curbside at the mall.
NetSuite conveniently lists things to look for when evaluating potential supply chain partners. These are people and organizations that you hope to work with for the long haul, after all, so the process requires some homework on your part. “Companies should view their most crucial suppliers as long-term strategic business partners rather than a temporary fix to a pressing problem,” the blog notes.
Here are some things to consider:
- Are their processes efficient? If you’ve worked hard to bring your own processes up to 2021 standards, you probably don’t want a partner whose best practices reflect the thinking of a decade ago.
- How strong is their security and compliance? Does this company take adequate steps to protect its own data and products? If not, then some of its problems could become yours, too.
- What are their technological capabilities? “Sometimes businesses can overlook the fact that suppliers have their own IT infrastructure, which may not work perfectly with your systems,” Sukhi Jutla, co-founder and COO of B2B jewelry marketplace MarketOrders, is quoted in the blog as saying. Do your due diligence.
Other smart practices include setting expectations and maintaining strong communication with suppliers.
Note: None of this is meant to advocate for arbitrarily dumping your current partners. If you apply the above criteria to someone you’ve worked with for years, you might find they check all the right boxes or are at least open to making improvements.
“There is definitely a balancing act with new suppliers coming in, those new relationships, versus ‘hey, let me go back to my current partners and make sure we exhaust every avenue we can exhaust with them,’” East Coast Wings COO Tom Scalese told NetSuite. “That’s what I do first. I want to keep it with that partner because they know me, they understand me, they know the quality I want.”
The NetSuite blog is worth reading. You can find it here.