Beyond the Spreadsheet
Methodically standardize your criteria. These criteria should be designed to shed light on particular behaviors and processes, not to simply elicit yes/no responses. Here’s an example:
Don’t Ask: Does the supplier have a quality inspection system?
Do Ask: How many full-time auditors are on its staff per 100 production workers?
Do Ask: What kind of auditing is done at each stage in production? Have the vendor describe it in full detail. Request to see examples of auditing reports.
Once you’re armed with the right questions, call everyone you know who may know something about the potential supplier. You’ll be surprised how connected you are after making just a few calls.
In addition to your standardized criteria, ask each potential supplier these questions:
1. What is the one thing that really sets you apart from others in your business?
2. If you had to pick just one product to make, what would it be?
Try to get at what the supplier is really good at and whether it aligns with your critical success factors.
Next step: Get references from the supplier’s current clients. Dig vigorously for any potential trouble spots. Make sure any of the supplier’s weaknesses don’t undermine what’s important to you. It’s easy to unearth a supplier’s strengths because they’re usually on display during a prospecting call. So spend enough time looking for suppliers’ limitations up front, because it’ll get ugly if these emerge later.
If you’re starting from scratch and your phone calls to colleagues and friends don’t yield many leads, there are some excellent online resources available. One notable one is Panjiva.com, which rates more than 40,000 suppliers, mainly in the apparel and accessories areas. In addition to using supplier- and customer-reported data, Panjiva uses data from third-party sources, such as U.S. Customs and various certifying organizations. This enables it to give ratings on a whole range of criteria, from quality to customer loyalty to social responsibility and more.