Jeremy Ferrer
Webinar :
Cross-border Purchases and VAT: Optimization Strategies
Tuesday Sept. 10, 2024 at 11 am (France)
The choice of suppliers, also known as supplier sourcing, has a significant impact on a company's activity and on its turnover. Hence the interest in not neglecting it. The establishment of a Method of supplier sourcing allows you to choose the right partners with whom you need to work to ensure your supply chain. The objective of such an approach is to surround yourself with quality suppliers, to keep them over time and to avoid unpleasant surprises. In this article, we tell you more about what a sourcing suppliers, and the different steps to achieve it.
Also called procurement sourcing or supplier prospecting, supplier sourcing is an approach that consists of identifying, comparing and evaluating the best suppliers that a company works with taking into account several criteria, including quality, cost and production or delivery time.
The supplier sourcing process therefore allows you to benefit from a better quality/price ratio and a better production time. The benefits of a good choice of partners for the company are:
Having become eminently strategic, supplier sourcing meets several challenges:
Sourcing suppliers cannot be improvised. Indeed, the selection of reliable suppliers requires following certain steps. So what are they and what is their purpose in V ?
BME experts offer you a 7-step approach, the result of recognized field experience.
The goal: to know which suppliers are likely to meet the needs of the business.
You will therefore create a first list of established suppliers — those with whom you already work — as well as a second list made up of referenced suppliers.
This step consists of a primary listing of all the providers who are likely to meet your needs and with whom you can potentially collaborate.
The aim: To locate the sources of information that will make it possible to select the best suppliers. Collect the supplier cards from the existing panel.
Select sources:
— paid (specialized sourcing providers, marketplaces).
— free (trade shows, supplier catalogs, trade unions and professional federations).
Numerous other sources can be used to identify suppliers, including B2B matchmaking platforms, Yellow Pages, chambers of commerce, directories, and social networks, such as Linkedin.
Of course, there are also recommendations made by third parties, such as word of mouth, which can also be excellent sources for finding reliable suppliers. However, be sure to check their objectivity and sincerity.
The aim: Define the main themes to be taken into account.
This step requires defining the selection criteria in order to properly select suppliers. Those who will be selected will therefore have fulfilled the criteria in question. These relate mainly to the needs of the company and the market. Apart from price, time and quality, other criteria must also be taken into account in the sourcing suppliers, including:
After listing the criteria, you can start writing the RFI or Request for Information. This document contains all the criteria you have selected to help you select the best suppliers. All that remains is to send it to the suppliers who have passed the first selection.
Attention, if you opt for a supplier sourcing internationally, be vigilant about certain criteria, such as compliance with quality standards, political and environmental issues and regulations.
The goal: Exploit supplier data
Make an initial telephone call with the supplier to discuss general questions.
Send the RFI directly to the supplier with an expected return date.
This first contact is very important. The aim is to establish a relationship of trust and lasting over time with the supplier. The challenge of this stage is to establish a dialogue that allows you to discuss the most interesting conditions for your company while assuring the supplier that it will also find its interest in the partnership.
This first contact allows you to know in concrete terms what the supplier can offer you and to assure you of its reliability. In general, this stage is followed by a physical meeting, in particular to discuss pricing conditions.
The aim: To better assess technological skills
Meet your suppliers
Visit their company: you will be able to better identify and understand their skills!
Exchanging with your suppliers is not enough to assess their reliability. You really need to meet them and do an in-person assessment of their skills. Gradually, based on the information you have collected, you will create your shortlist that includes the partners you absolutely want to work with.
The aim: To analyze the information collected
Receive and classify the information collected
Perform a multi-criteria analysis of the information.
Do not neglect this step thanks to which your supplier sourcing process will be really operational. It consists in comparing suppliers based on the information collected.
These can be classified into 6 categories:
The aim: To select the suppliers selected to participate in the Call for Tenders
So, by respecting these key steps, you ensure that you make a supplier sourcing effective. At the end of the process, you will get a short list that corresponds to a very restricted list of suppliers who have successfully passed the various filters set out above.
To ensure the reliability of a supplier, you can also test by making a first order with little impact, that is to say whose cost is low and not urgent. This first order allows you to verify the seriousness of a supplier, its willingness to respect its commitments... So, remember to check carefully whether each clause of the contract has been respected, the deadlines, the quantity, the price, etc. Also assess the quality of communication and exchanges. These few precautions allow you to minimize supplier risks, and possibly to review your supplier sourcing. It would be better to lose a little bit of money doing a sourcing suppliers, rather than spending a lot because of inoperative sourcing.
Before undertaking any supplier sourcing method, you first need to know what benefits you can get from it.
The first benefit you can benefit from by doing supplier sourcing is to save money on your purchases. Good sourcing allows you to minimize your procurement costs, and therefore increase your margins. Note that prospecting for suppliers should not stop. It is a continuous work. You should always update your sourcing to best meet the goals set by your company.
The other benefit you can get from a supplier sourcing process is to have an enriched and diversified supplier catalog. This contributes on the one hand to reducing supplier risks, and on the other hand to minimizing the dependence on a supplier.
In short, supplier sourcing is really a way to ensure the sustainability of your business. Indeed, a lack of supply due to poor sourcing or a lack of sourcing has significant impacts on your production deadlines. Supplier prospecting therefore allows you to maintain the health of your cash flow as well as the performance of your business.
In the digital age, the supplier sourcing is also digitizing. You can now count on software solutions, such as Sourcing Force, to conduct and automate your supplier prospecting.
The digitalization of supplier sourcing is one of the forms of digitization of Purchasing. An e-sourcing tool can offer various functionalities, including the search and identification of good suppliers, the management of RFI, the evaluation and comparison of suppliers, the management of supplier contracts, the monitoring of partner performance, the analysis of results, the analysis of results, communication between teams and suppliers, etc. Such a tool also takes care of billing.
By being your single point of entry, Buy Made Easy allows you to free up valuable time for your Buyers. We take care of the entire procurement process:
Finally, focus on your projects with high added value!
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