How to choose the best suppliers?

Whenever we have to replace or upgrade things, one big problem is always choosing the right supplier which offers good solutions without charging an arm and a leg.
How to choose the best suppliers?
This is a common challenge faced by small and medium enterprises run by their owners, but there are some simple steps you can take to reduce pain as follows:
Plan where to search for suppliers
professional buyers use a couple of tools to know what type of providers should be approaching. This prevents the selection of suppliers that will never be able to do the job.
The first tool is the positioning of supply. This is in the product / service (category) that are buying and plots on a grid to determine the type of relationship they want with the provider of choice. It is divided into four categories as follows:
Close – Keep a low entry level buyer, for example by outsourcing or consolidation of suppliers.
secure supply – efforts are focused on ensuring a high level of performance insurance providers. Little effort on price but high effort in the selection.
Drive benefits – greater emphasis on price, using market pressure to drive costs lower.
Partner – High providers approach. Long term relationships with mutual risk and reward. Big focus on continuous improvement in product performance and service.

Use this with the same process in reverse (so you get the perspective of the supplier). This will reveal how one views provider of your account and is divided into four categories as follows:

Ignore – will apply low quality or no resource to account development and service.

Develop – will try to determine the development potential of the account and apply the resources if it is proved.
Exploit – Retailers seek ways to improve the margin / free up cash, and often under-service the account unless strongly managed or given reasons to do so.
Core – Provider will focus on high quality resources. They seek to develop long term relationships with mutual risk and reward.

Attractiveness is determined by things like how easy (and low cost/effort) you are to deal with, how well you pay, if you are seen as a growing business, and the attractiveness of your brand as a reference.

Therefore choose relationships fit the product / service you are buying, and choose suppliers that are attractive and see you as a growing or large account.

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