Vetting prospective suppliers is part art, part science. To do it well, you’ll need to navigate in the gray, as well as calculate in black and white. But as I have outlined recently, there has never been a more critical time to be sure that you have the correct partners to support strategic initiative launches, such as your participation in the circular economy.
When you begin a partnership with a new supplier, you can never be sure of a happy ending. But if you’ve done your due diligence beforehand, chances are your candidates for The Final Rose will have qualities that complement yours.
Still, you may be wondering if your newest supplier is really THE ONE. And I’d say that some doubt here is completely understandable—and totally unavoidable.
But I’d also ask you this: Do you know which of your angst-y apprehensions should make you run for the hills? Like, right away? And at full speed?
When it comes to suppliers, here are the red flags that stoke my worries:
- Too many promises made: Beware the partner who promises everything to everyone. You need a partner who’s able to: 1) prioritize their commitments, and 2) tell you—straight up—where you fall in that list of concerns.
- Too few questions asked: If your prospective supplier isn’t curious about your business, they may not be serious about it either. Silence, at least in this case, is certainly not golden.
- Ill-defined company vision: If you’re a regular reader of this blog, you know that “the vision thing” is near and dear to my heart. For one good reason: You need to know where your partner is headed, so you can see how well they’ll support your goals.
- Incompatible visions: When a supplier’s vision doesn’t line up with yours, you can expect conflict to follow.
- Underdeveloped or unclear processes: To deliver products on time, on budget, and with impeccable quality, a supplier must have fully developed and well-articulated systems, processes and measures. They should also be able to share these details with you.
- Scant knowledge about local production and country-of-sale regulations: Because there’s a lot of risk involved in production, you need a partner who knows the local rules by heart—and is willing to play by them.
- Little respect for others: If a supplier is willing to “talk some trash” about their team, their customers, or other suppliers, watch out. When you’re not around, there’s a good chance they’ll run you down, too.
- Lack of follow up: ‘Nuff said.
- Restricted access to the supplier’s facility: Whenever I had to comply with special rules or restrictions in order to visit a facility—especially when my own product was being produced—the facility was, without exception, hiding an issue from me.
- Limited access to the leadership team: You say you’re unable to easily connect with your partner’s leadership team? Well, then I’d say you’re probably not all that important to them.
- Worrisome cash flow: When a supplier requests early payment or unreasonable terms, it could mean they need cash, pronto. This issue, however, can be a sensitive topic to discuss cross-culturally, so tread lightly but listen for concerns.
I’m curious . . . what sorts of conditions set off alarm bells in your head? If you can, take a moment to post them in the comments section below.
And let me leave you with this: If you get that queasy feeling about a supplier, trust your gut. And let your business values lead the way.
When you do these things, not only will you learn and grow—but you’ll also end up building an amazing supplier matrix, too.