Vetting a Supplier

Effective sourcing must dig deep into supplier attributes and reputations to succeed in today’s competitive, data-driven business environment.

ICAT GB4A8152 Dan Cser ICAT 5941abf0cdc9a

The ability to find and keep exceptional suppliers has always been fundamental to the success of a business, no matter the industry.  But there was a time when companies thought it was enough to evaluate their supply partners based simply on price, location, product selection and capacity.

While those qualities remain essential, effective sourcing must look much further than a four-point checklist in today’s competitive, data-driven business environment. 

When vetting a potential supplier partner, adding attributes such as shared standards for quality, safety records, integrity, employee satisfaction and customer care to the selection criteria will help ensure a reliable, long-lasting supplier relationship. 

Remember:  When a new supplier joins your team, they represent you when you cannot conveniently represent yourself.  You want strong supplier partners you trust and whose business practices are transparent. 

That kind of supplier/client relationship can only be established through careful vetting, thoughtful communication, training and trust. 

Your customers may be thousands of miles away, or just down the road, but the need to establish a reliable supplier team is the same either way, for a small or mid-size company or a large one.  And though resources for vetting and managing risk may be fewer in smaller firms, customers care about results when they evaluate how they are being serviced.

How to begin establishing a new and prosperous relationship?  Start networking with your current supplier and client network – companies and individuals you rely on as partners and advocates who represent you well in markets around the world.  Ask for feedback about firms they have dealt with.  But that’s just a start.

Search engines that seek to pair companies with potential suppliers may be another initial step, but Internet searches can be as superficial as dating services.  On the surface, a candidate may look spectacular, but you’re going to require a lot of time together before a permanent relationship is proposed.

Engaging a new supplier simply on a “good feeling” or the recommendation of a friend or business partner isn’t enough.  The following steps will help you determine a good fit that will serve you and your clients: 

Due Diligence:  Check credit reports, online reviews and news reports.  Does the supplier have a clean reputation, a strong balance sheet and ample cash flow?

Structure, Size and Management Team: Are you looking for a large supplier who does it all, or a smaller supplier who will provide custom service?  The experience and philosophy of the management team—often stated on the company’s website—and the company’s structure may begin to define how you will interact. 

Safety & Integrity:  Ask to see the company’s safety record.  Are there procedures in place that reflect a management team concerned for the safety of their workforce and the approach they will take in handling your products?  Are there written policies that reflect the integrity they expect from employees and management?

Quality:  Does the potential supplier keep quality and reliability metrics that they will share and discuss?

Employee Satisfaction:  Ask about employee turnover and the average length of service of employees. Is regular training available?  Is the staff keeping pace with innovations in the industry? 

Ability to Communicate:  Is this a team that shares information freely—and will keep you in the loop no matter what?  You can only determine so much by telephone or video conference.  The next step is critical.

A Face-to-Face Meeting:  If the relationship is important enough, a face-to-face meeting at the candidate’s facility will provide the best information and is essential for helping to answer the important questions that remain.  Is the company well organized or chaotic?  Is the facility convenient to transportation?  Is the facility clean and well organized? Is the team transparent about its strengths and weaknesses?  Do employees seem competent, cooperative and proud of the products or services they provide?  Do you share the management team’s philosophy on customer service, safety and fairness?

A thorough sourcing process is time consuming, but can save costs, delays and protect the reputation of your organization.  You only need one major mismatch or bad choice to prove that a careful vetting is worth the effort.

Dan Cser is the agency owner of ICAT Logistics DTW, a freight-forwarding firm based in metro Detroit that specializes in the customized shipments of oversized industrial equipment anywhere in the world on challenging deadlines. He has spent 35 years in the cargo shipping business, with more than 20 years at the helm of ICAT Logistics DTW.