Purchasing

2. Supplier Selection

2.1 Suppliers should be easy to find, through:

• Existing suppliers or competitors' suppliers.
• Trade journals, trade associations and Chambers of Commerce.
• Business Link (0845 600 9 006).
• Directories - in the library or on the Internet, such as www.yell.com.
• Business directory websites, such as www.thelocalweb.net or www.scoot.co.uk. The Used Equipment Network has used machinery, from aircraft to X-ray scanners.
• Suggestions from friends and employees.

2.2 Make up a shortlist and write to each supplier, explaining your exact requirements.

• Ask suppliers to send you product details, price lists and other relevant information.
• You can often obtain better terms by letting suppliers know that they are competing for your order.

2.3 Pick out suppliers you believe can offer the quality of product and service you need. Compare them in terms of:

• Product suitability and reliability.
• Reputation, based on references.
• Quality and flexibility of service.
• Location and ease of communication.
• Speed and frequency of delivery.
• Price range and order size.

2.4 For long-term supply contracts, make the effort to visit those suppliers that seem to meet your quality standards. To assess how they are likely to perform, ask yourself:

• Are they professional, or sloppy?
• Do they have too much work, or not enough?
• How eager are they for your business?
• Do they have the necessary equipment and space to cope with your order?
• Do they appear to be financially stable?

2.5 Get quotes, including details like discounts and payment terms, to use in negotiations.

• Ask how often prices will rise, what influences will cause them to rise, and how you will be notified.

2.6 Once you have narrowed the choice down to two or three suppliers, negotiate prices, discounts and levels of service (see Negotiation).

• For a healthy long-term relationship, do not negotiate too hard a price at the expense of quality.