I was recently interviewed by business columnist Jamie Herzlich over at Newsday for an article she recently wrote, “Small Business: Choosing the Right Supplier.” (May 14, 2009) Many businesses are struggling with the challenge of how to choose the right suppliers. According to Ms. Herzlich, many business owners are unaware of what to look for in a supplier beyond just getting the lowest price. To summarize the key points in the article, businesses are advised to:
1. Look at total cost instead of choosing the supplier with the lowest price, as it is important to balance other important elements such as quality, delivery, and service.
2. First determine your business’ requirements. This will help you figure out whether a supplier can meet your requirements. If your company has to meet stringent customer standards, then so will your suppliers in order for your company to be successful.
3. Consider making a site visit to a supplier to see their facility firsthand, meet their management, and help increase your knowledge of and comfort level with the supplier.
4. In some cases, using a distributor may be a good option for small companies, particularly those who want to buy in smaller quantities than buying directly from manufacturers will permit. This will help keep one’s inventories lower.
5. Keep the lines of communications open and develop good relationships with suppliers to help work through changes and problems as they occur.