Top Five Tips For – Supplier Review
Supplier Review, or Control of External Resources to coin the ISO reference, is an important part of managing, assessing and controlling your third-party suppliers. Nearly every single business will rely on at least one external supplier to deliver their products or services. From an ISO Standard viewpoint it is about making sure the quality of the final product or service is maintained and assured, but equally, we think it’s a great tool to help stay on top of this area within your business and possibly identify opportunities for cost savings. Please find below our Top Five Tips for Supplier Review;
No 1 – Supplier List
Put together a Supplier List; most accounting packages can do this for you, but you can also use a simple spreadsheet. As a minimum, include Supplier Name, Type of Service or Goods, Account Information and Contact Details. Keeping it simple and user-friendly works well as a tool to use regularly and keep up to date. You want to be able to add and remove suppliers as and when they change.
No 2 – Score Suppliers
Identify some criteria that is important to you and the delivery of your business operations; perhaps Cost, Quality, Speed of Delivery, Customer Service, Response to Queries, etc. are all key areas, add columns to your spreadsheet to record the scores, using a simple mechanism such as 1-5 for example.
No 3 – Review Suppliers
Using this scoring, try and review your suppliers frequently, we would recommend quarterly or six-monthly, but whatever works for your business and adds value to what you are doing. Don’t forget, that by discussing and reviewing your suppliers, with your purchasing team or manager, you may identify issues you hadn’t previously recognised, or find that you are using one or two quite frequently and be able to negotiate a discount or improved credit terms.
No 4 – Feedback to Suppliers
This formal review of suppliers gives you an opportunity to feed back to them, either with issues that you want to work with them to address, or with positive comments, which is a powerful thing and contributes to improving relationships and in turn, the performance, of that supplier.
No 5 – Monitor
If you do find that a supplier is not performing to the standards you expect, but you still wish to use them, you can use this system to define your expectations and monitor their performance. By monitoring in this way, you may catch an issue before it gets into production or delivery, saving you time and money. Being ahead of such issues will give you time to research and assess alternatives.