The search for suppliers is important when it comes to optimal purchasing management. It takes a lot of time, patience and instinct to build good and fruitful relationships with suppliers. Essentially, it is a matter of getting qualitatively suitable products at favourable prices and always being able to rely on being supplied on time and in sufficient numbers.
How to find, systematically select and evaluate suppliers.
Finding the right suppliers, filtering out the best and cooperating successfully with them is crucial for your supply security, a positive cost balance and the good quality of your products. Globalization is the keyword that has created completely new opportunities for purchasing and supplier search.
The consequences of globalization are the expansion of sales markets beyond the regions, an increasing number of competitors, the intensification of competition, increasing cost pressure, confusing markets and lower transaction costs.
Please note: You must not miss out on the opportunities offered by globalization in your search for suppliers. The possibilities offered by the Internet and other modern forms of communication have contributed significantly to a change in the procurement markets. In addition there are cheaper and more effective possibilities of logistics and transport.
The transparency of the markets has increased considerably. As a medium-sized company, you also have the possibility of worldwide purchasing and, above all, are confronted with this necessity by your customers.
Find suppliers: The markets have changed
On the other hand, the number of available suppliers of goods and services has increased, giving you more alternatives on the purchasing side and when searching for suppliers. The traditional seller’s markets have become more and more buyer’s markets. However, the global concentration process has also led to markets changing from buyer to seller markets. Energy and steel are the most important examples.
Information is available quickly and in a wide variety. There are now special Internet platforms for buyers, electronic markets and virtual trade fairs on the Internet. Information on current and potential suppliers can be called up at short notice via the Internet and facilitates the search for suppliers. Data can be exchanged by e-mail in a matter of seconds. Communication costs have been reduced to a minimum.
A major obstacle in companies is still the lack of foreign language skills. Knowledge of foreign languages is only necessary to avoid misunderstandings and to get offers for the right products and services.
What you can do when searching for suppliers
To make foreign business fit for purpose
It is the task of your strategic purchasing department or management to develop a personnel development concept and at least to ensure that your purchasers are fluent in English and have a linguistic foundation for the necessary small talk in dealing with business partners. Other languages such as French, Spanish, Russian or Chinese fall into the “nice to have” category.
Such a personnel development concept also includes dealing with the social and business customs of other countries and cultures in order not to endanger successful negotiations after the search for suppliers by unintentionally behaving in the wrong way.
Data for new suppliers in the net
It is helpful to have your own platform for purchasing on the Internet, where suppliers can get an idea of the quantities required using photos, drawings, etc. This does not necessarily mean that your purchasing department will have its own homepage. A part of the company homepage is completely sufficient.
The safety aspect is important at this point. Just put the necessary information on the net and secure access with passwords, for example. Patents and specific know-how are no longer a protective barrier nowadays, as they are much easier to copy and possible claims more difficult to enforce, but you do not have to make the competition smarter than it already is.
Furthermore, they must not lose sight of logistics. You will have to reckon with longer delivery times due to geographical circumstances. The design of contract conditions and deadline management also play a major role. Please bear this point in mind when searching for suppliers.
Basic information on searching for suppliers
For the supplier search you need a systematic process. Financial and technological strength, market position, competitive situation, quality, reliability, available capacities as well as personal and professional competence are decisive criteria when searching for suppliers.
You have to query and clarify these characteristics in advance if you want to conclude longer-term supply contracts that are strategically important from your point of view. In the case of an imminent change of supplier, a trial delivery for a part of the requirement is sensible first in order to test the quality and reliability of the supplier. You can find out your financial strength from bank information, credit agencies, the Chamber of Industry and Commerce abroad or the economic departments of the German embassies in the respective countries.
If long-term contracts are involved and the security of supply and the continued existence of your company depend on this supplier relationship, it can even make sense to obtain a supplier rating in advance. There are now several rating agencies that specialise in this service. It also makes sense to ask Dun & Bradstreet. Every company in the world about which information is available can be clearly identified using the D-U-N-S number. You will at least find what you are looking for at all larger companies.
Please note: Especially in international business, the costs for the query are worthwhile. A flop is always more expensive. Both personal and professional competence play an important role in the search for suppliers.
Ultimately, business is still done by people. And if the “chemistry” between the company and the people in the company is not right, you will not be able to build successful long-term business relationships that are lived and shaped. Building a supplier partnership pays off for you.
Especially in sales markets where the security of supply of your company is a priority, a grown relationship pays off. Of course, both partners must benefit so that one of them does not lose interest in the matter at some point.
Criteria for supplier search
One of your core tasks in purchasing is the selection and evaluation of suppliers and the establishment of a supplier management system. The selection of suppliers is based on 5 main criteria:
- delivery period
- ability to deliver
The fulfilment of these 5 criteria must be given for the entire course of a business relationship. In the long run, these requirements are only met if a win-win situation arises for both parties, i.e. if the customer and supplier benefit from the relationship. If this is not the case, the supplier will have no long-term interest in a continuation of the business relationship and will look for alternatives on the market.
In order to achieve sustainable benefits from a supplier relationship, you need supplier management. Your supplier becomes a fixed link in the value chain of your company. Within the framework of the new term Supply Chain Management (SCM), the supplier becomes a value-added partner. You enter into a value-added partnership. In this concept, a reduction in purchase prices and an attempt to reduce purchase costs are no longer sufficient.
The entire chain from your supplier to your customer is in focus in order to meet the requirements of the market. Integrating the supplier into the supply chain creates sustainability. Improved service, flexible reaction to changing requirements, faster product development and market launch (time to market) at the right time become possible.
In this context, the supplier plays an important role. The selection of suppliers as well as the optimal design of communication and cooperation between companies and suppliers is of decisive importance.
This means that all relevant criteria such as quality, price, delivery service, flexibility, innovation potential, communication capability, the willingness for long-term cooperation and possible risk factors must be taken into account in order to avoid wrong decisions in the search for suppliers and the potentially serious consequences of possible risks as far as possible.