5-Step Successful Vendor Selection & Supplier Sourcing Process

One of the last things you want to see in your project is to switch to a different supplier in the middle of the process. Think about the time and money you’ve invested in the first supplier and how much more you’ll need to find the actual ideal supplier for your product.

So why not get off from the right foot at the very beginning? This is why supplier sourcing or vendor selection is too important to be taken halfheartedly.

So what do you need to do to ensure a successful supplier sourcing process? Hard as it may seem, the answer to this question is not that hard to figure out. Here is a 5-step approach that’s going to help you out.

Recognize the need for a supplier sourcing

Before you send out the request for information (RFI) or request for proposal (RFP) to your potential suppliers, see if there are available resources in the supplier resource pool. Such supplier resources are usually seen as the back-up candidates, and it will just take you a small amount of time to give them a look.

If you don’t find one that fits the need, just move on as planned. But if you dig the gold, it may save you tons of time from having to source a supplier from the top.

If you haven’t built your supplier resource pool just yet, start now. It won’t take you or your potential supplier much time, but the result will significantly benefit the both of you.

Define critical requirements

The next thing you do, gather a sourcing team, and define the critical technical and business requirements for your product, material or service.

Also define the capabilities and expertise you need to see in the potential supplier.

The thing is, you might not be able to find a supplier that ticks all the boxes, but you can appoint the priority to the requirements, and even offer to provide education to the highly potential supplier. This is also a great way to build a healthy supplier relationship and drive your supplier performance.

Decide sourcing strategy

When you’ve made sure that you need to expand your supplier sourcing scope and got the critical requirements ready, it’s time to reach out.

There are 3 general supplier sources: Google, online directories such as Alibaba and AliExpress, and referrals from friend and families. Oftentimes, the last method produce the best effects, but no all the times. So you still need the internet.

When you’ve complied the list of potential supplier that you can reach out, send them a request for information (RFI), and evaluate their responses for further selection.

Here is a free request for information template for you to download if you don’t have one just yet.

Shorten the supplier list

You might have a long list of suppliers to reach out before you send out the RFI, but when you get responses from them, it’s time to shorten that list.

Evaluate the supplier’s capabilities against the requirements that you set, and pay attention to the potential capabilities as well, since you might not be able to find just the ideal supplier that meet all your needs. This process will be done swiftly if you have a quantitative evaluation scorecard.

When you’re done, share your shortened supplier list with all stakeholders, and why you make such choices. Take their advice and make adjustment as needed.

Select supplier and reach agreement

When you have a short list of suppliers, you can send out a request for proposal (RFP) or request for quotation (RFQ) as per your needs.

If you’re not quite sure what they are, here are two posts that’s going to help: Request for Information: what is is and what are the best practice for it and  Request for Proposal: how to write an effective RFP.  Such documentations will usually help you select the ideal supplier from a list of 3 to 4 of them.

Or if you have only 1 or 2 potential supplier left, you can just reach out to them and verify if they are really capable of what they claim.

At this stage, it’s important that you run potential risk analysis jointly with the selected supplier, and assign liabilities clearly. The key here is to see your supplier as a partner,  one that can actually help you achieve your goal.

So that’s what we want to share with you in this post, how to find you the ideal supplier in a 5-step approach.

If you have any question regarding finding an ideal supplier, or not sure how to select the right supplier for your product, feel free to reach out, and we’d be glad to help you out.

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