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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