How to find suppliers has never been an easy task. Supplier sourcing is a critical element of the procurement process. Before materials are procured from suppliers, you must first do extensive research and detailed company comparisons to shortlist which suppliers are best suited for your business. This process is known as strategic sourcing.
Strategic sourcing is far more sophisticated than traditional sourcing. Selecting a supplier is no longer as simple as choosing the option with the lowest prices. While this still may be the case in some scenarios, not every supplier is the right choice for your business model, even if they have the best price. The primary difference between the strategic and traditional sourcing approach is that strategic sourcing only views cost as one component for their supplier evaluation criteria. Other components such as product quality, assurance of supply, innovation, location, and company culture can be of equal importance, none of which will be sacrificed just for the sake of lower prices.
It’s important to remember that suppliers are your business partners. Finding the right supplier for your business will set you up for success, allowing you to save you money and improve customer satisfaction. On the contrary, choosing the wrong supplier can lead to greatly reduced profits, while potentially damaging your brand image. This guide will provide you with a better understanding of how to find suppliers that are the best fit for your business using strategic sourcing tools.
Suppliers can be found through a variety of channels like visiting trade shows, recommendations from friends/business acquaintances, and business advisors. However, in today’s day and age, the most popular and efficient method to finding suppliers is online.
Due to the evolution of global trade, manufacturing centers have shifted to geographical regions like China, India, and South East Asia. Manufacturers are now widely dispersed all over the world and online B2B portals have become the fastest way for buyers to find international suppliers.
For example, how to find suppliers in China using a B2B portal such as BizVibe, all the user needs to do is simply choose their category of interest. Once a category is chosen, you can target Chinese suppliers using the ‘country’ filter (in this case, you would choose China). Other basic filters that can be used to further narrow your search include employee size and company revenue. Each category will also have their own set of advanced filters. For example, when searching for food manufacturers, users can filter by recipe, packaging type/sub-type, quality certificates, and more to see targeted results.
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Once you’ve discovered potential suppliers that meet your needs, it’s best to build a shortlist of candidates for further evaluation. When creating your shortlist, you should think strategically and ask yourself questions such as:
· Is the supplier financially secure?
· Is the supplier approved by any trade associations or governments?
· Is the supplier safe to do business with?
· Does the supplier share my company culture and values?
· Can the supplier help me overcome industry challenges?
This type of information can be found by viewing supplier company profiles. These profiles will contain key insights and data points such as supplier revenue, liquidity ratio, management effectiveness, organizational structure, and more.
If the supplier profile does not answer all your questions, there is also the option to send the supplier a request for information (RFI). An RFI is a document of general questions that is sent with the intent of gathering more information about the capabilities of a supplier. This document is a quick way to learn if a supplier is best suited to solve your company’s challenges.
B2B portals like BizVibe allow you to create custom RFI questionnaires from pre-formatted templates which can be easily edited to support the intent of your RFI. These templates can help you quickly create targeted RFIs that will generate informative responses from suppliers.
Now that you have a manageable shortlist, supplier due diligence is a best practice conducted to mitigate supplier risk. Before starting the lengthy and expensive RFP process, it’s best to do some more research to ensure you are engaging with suppliers who are best suited for your business. This extra bit of research and evaluation can be done by using sourcing tools such as company tracking and supplier comparison features.
These tools allow you to stay up to date on the latest company news, social media posts, organizational changes, financial reports, negative news, and more. You can set up real-time mobile alerts for whichever news is the most important to you. To save time during this supplier evaluation process, comparison tools allow you to view the latest news and insights in a single view. On BizVibe, you can view up to eight companies in one glance.
You’ve targeted the right suppliers, created a shortlist, completed your evaluation homework, and now you’re left with a few suppliers who seem right for your business. As mentioned earlier in this article, while pricing is important, there are other factors of equal importance to consider when selecting a supplier. Sending a custom RFP to these suppliers is the final step to gathering the critical details needed to make an informative selection.
RFPs give you an opportunity to ask specific questions about a suppliers’ methods and capabilities, to help you zero in on what’s the most important to you. Whether the most important factor is company culture, product quality, or assurance of supply, an RFP will help you find out who’s best suited to be your partner.
To ensure you receive informative responses from your shortlisted suppliers, the proposals must be high-quality, detailed, and structured in a way that concisely presents your needs to the supplier. This process can be quite time-consuming and expensive. To cut proposal times and save costs, using pre-built templates can help with creating professional looking RFP documents that will increase the chances of receiving a high-quality response.
There are RFP templates for all complexities that range from a single-step process to a multi-stage process for more complicated proposals. These templates can be easily edited to further customize the goal of your RFP. After you’ve received responses to your RFPs, you should have enough information to score each supplier and create a priority ranking of which supplier is best suited for your business.
Here at BizVibe, we innovated the modern B2B marketplace to make your sourcing process faster, smarter and hassle-free. Join today to benefit from a list of designed features for your strategic sourcing, including: