Supplier Identification Lessons Learned
Why Is Good Supplier Identification Not As Easy As It Sounds?
PurchTips Edition #361 – Click here for the printer-friendly version
NLPA Member Question: What is the first go-to place for identifying suppliers?
The typical knee-jerk answer is “the Internet.” But that ignores a source that can help you avoid an embarrassing introduction to a supplier you should already know. A source that reveals the suppliers that are the easiest to onboard. A source that doesn’t require that you engage with a third-party technology provider. What is that source?
That source is your own procurement system! Furthermore, a common problem among large organizations is that many buyers do business with a single supplier and fail to leverage the organization’s aggregate volume. Sometimes, the same supplier will charge different prices to different departments in the same organization. Sometimes, a fellow employee may be managing a supplier relationship that has an importance unbeknownst to you. Therefore, I always recommend checking your own systems for suppliers first. You may uncover some important information!
I also recommend using more than one source to find an important supplier. Just because a supplier has done business with your organization in the past, doesn’t mean that it will be the best supplier for you in the future.
NLPA Member Question: Do we need to send a solicitation of interest before sending an RFP?
When your response rate is uncertain, it can be a good idea to request a “notification of intent to bid” from suppliers. However, because more and more RFP’s are being ignored by a jaded supply base, it can be even better to have personal conversations with each supplier. This way, you can make them feel that they actually have a legitimate chance of earning your business, get them excited about responding, and get assurance that they will indeed respond.
One of the most embarrassing things for a procurement department to endure is for no proposals to show up by a due date that has been communicated to stakeholders. You always want to have a feel for how many proposals to expect.
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Copyright 2016. This article is the property of the Next Level Purchasing Association and may not be copied or republished in any form without the express written consent of the Next Level Purchasing Association. Click here to request republishing permission.
By Charles Dominick, SPSM, SPSM2, SPSM3
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