The new age mantras of any business today are “the customer knows best” and “the customer is always right”. Businesses have grown and fallen because of the all important customer. While the customer is king, and businesses are geared towards serving their customers in every way possible, without a good supplier or supplier chain to sustain the business, the customer base will fast disappear.
Hence the key to running and managing a business successfully means that you have a strong customer base and a stronger supplier base. So how do you decide if a supplier is good and trustworthy?
Before answering that, let us begin with first understanding what defines a good supplier.
A good supplier is one who can meet all customer expectations, with respect to delivery time, quality of goods and dependability.
Therefore it is logical to infer then that a good supplier is one who meets theses qualities. However while the laws of commerce have remained relatively simple, the demands and expectations of the customer keeps evolving. And hence the role of the supplier has changed as well. Keeping in mind the expectations of the customer, the following list contains seven key characteristics of a good supplier:
Timely delivery: A good supplier is someone who keeps up to timely delivery of goods and supplies. Delayed supplies leads to business losses to the immediate customer and in turn delayed delivery to the end customer. This also opens up avenues for other secondary systems like buffer inventories to keep the chain going in addition to increasing overall costs.
Constant frequency of delivery (daily basis): If a supplier can keep to supplying goods at constant and smaller frequencies, then the cost advantage is supplemented. Meaning, if a product or part is found to be defective, then the time spent in replacing it is minimal as opposed to having to replace a whole carton or shipment of that item since the delivery is frequent and the supply chain is actively functioning. This is not only cost effective but is also a time and space saver.
Reasonable price: Business owners and suppliers add the cost of purchasing materials for a product into its retail price making it costlier. A reduction in this cost will lead to a reduction in the cost of the product as well.
Minimal paper work: From the placing of an order to the actual buying of an order involves a ton of paper work. A good supplier will find ways of reducing the amount of paper work involved.
Quick response/ turn around time: The world of business is highly unstable, and often the gap between demand and supply can be hard to predict. A good supplier will always be prepared to meet such a contingency. Again a frequent and smaller quantity of supplies is the key to eliminating this gap.
Inspection of goods: Inspection of goods is a time consuming activity for both the supplier and the buyer. However quality assurance of the goods can again reduce the time spent on inspecting the goods.
Taking care of wear and tear and transport damage: Transportation and delivery often involves a lot of wear and tear and a good supplier is someone who recognizes these limitations and takes proactive steps to help reduce or avoid the damage involved.
The importance of a good supplier cannot be undermined and it can be said then that a business is as good as its suppliers.