Supplier Vetting, Made Easy
In a previous article, we talked about the first step in searching for a new supplier: self-reflection.
But once you know what you’re looking for, what comes next?
Well, you complete a careful and critical examination of your potential supplier, also known as vetting. When you know who your supplier is, what they do, and how they do it, you’ll not only help keep your business on track, but you’ll also help avoid costly delays and mistakes down the line.
Vet with a Plan
Of course, you can only learn so much about a supplier beforehand, and you’ll certainly find out much more once the work begins.
You can, however, put yourself in a strong position by having a well-designed vetting plan.
In the next several posts, I’ll help you build that plan. You’ll learn what you need to vet, how to vet it, and the why behind it all.
Focus on these Areas
First up, let’s talk about what you’ll need to vet for a potential supplier. There are several critical areas you’ll want to examine:
- General overview of the supplier’s business
- Product development process
- Sourcing expertise
- Production processes and techniques
- Quality assurance oversight
- Responsible sourcing practices
- Competitive advantages
Dig in to all these areas, and you’ll have a strong sense of whether the supplier is a good fit for your business.
Which brings up the next question: how exactly is this vetting done?
How to Vet: The General Overview
To vet a supplier, you’ll ask a series of questions (and make a series of observations) for each of the critical areas I just mentioned. Even better if you are able to do this work on site, to really see how production comes to life.
Let’s start with the general overview. Here, you’ll find out who your potential partner is by asking questions about their business structure, as well as their strategy, customers, and plans for growth.
- Where is the supplier located?
- What is their business structure?
- How are they managed?
- What makes this supplier unique?
- What is their value proposition?
- What are this supplier’s top business and strategic goals?
- What is their vision or mission statement? Their commitments?
- Who are the supplier’s current customers? How long have these partnerships been in place?
- What are the supplier’s key revenue streams? Are they expanding?
- How does the supplier learn about the industry? And keep growing?
The Questions Behind the Questions
It’s one thing to ask the right question. It’s another to listen carefully to the supplier’s response. But the real test comes when it’s time to reflect on what you’ve learned.
In other words, how can you better understand if the supplier (at least at this early stage of the vetting) would be a good match for you?
Well, I’d say you need to reflect on the “questions behind the questions”— or, what you’re really trying to discern from this general overview.
In my mind, these questions would be:
- What is the supplier’s culture really like?
- Do they share our values?
- How transparent is this supplier?
- Are their growth plans compatible with ours?
- How does the supplier fit into the matrix we already have? What benefits would they bring?
- How similar is our organization to their other customers? Are we bigger or smaller—or are we a different channel?
- What would our relationship look like? How does this supplier manage their customer service?
- What would be the learning curve for working with this supplier? How long would it take for us to work together effectively?
There’s lots to think about, right?
And this, dear readers, is only the start. Before you decide to bring that new supplier into the fold, you’ll still need to vet many other areas.
More to come, in the following weeks.