When you source from China, it is vital to work with suitable China suppliers, but it is uneasy to choose from the long list you find online. How do you evaluate them? Make sure you evaluate the current suppliers’ quality level and status periodically driving them to improve quality continuously. However, make sure you balance quality and costs.
A good procurement process should also ensure a good supply of the materials and inventory management. This is how to do it:
(1) Review the supplier’s internal supply chain status and operation level. This includes logistic issues from the raw material channel to finished product shipment.
(2) Supervise suppliers to ensure they set up a rigorous scientific internal supply chain operation process and strictly implement it.
(3) Establish safety stocks through supplier management inventory and other inventory agreements to avoid material shortages. Inventory quantity should be controlled properly.
The above are ideal for managing current suppliers. When developing, selecting and evaluating new suppliers, more official evaluation is needed.
1. Overall situation of supplier
What is the size and overall strength of the business? Does the management have long-term development goals and specific strategies? How is the overall personnel quality? What about the workers, technicians and management? What about the level of quality management? What is the financial position of the enterprise and commercial reputation in the industry?
Nowadays, personnel quality and attitude of an enterprise are increasingly becoming key factors in supplier evaluation. Without high-quality and sincere service attitude of the relevant personnel (production, quality assurance, research & development, and customer service, etc.), it is difficult for companies to offer high-quality products and services to customers.
2. Production cost evaluation
A. The cost of raw materials: Buy raw materials directly from the factory to save the purchasing cost.
B. Internal production costs: In the case of quality and accuracy, try to apply low cost production equipment, low cost accessories and components.
C. The management structure is more streamlined.
D. Good logistic conditions and geographical location (help reduce transportation costs).
E. Low margin requirements.
3. Quality level
The quality assurance personnel of your company shall take the lead in evaluation according to ISO and QS standards. Also, you can check the quality of their online production, and samples in their showroom. Basically, by these methods, you will be able to judge quality level of the supplier, is it low, medium, or high? Does the quality level match your needs?
4. Supply chain stability
Is there a stable raw material procurement channel? Is there a sound internal production organization and planning system? Is there good communication and cooperation between the production department, purchasing department and customer service department on production and shipment? Is there a specific production and shipment response plan for an emergency or special case?
Besides, you should also note the basic principle in selecting supplier: Do not choose a supplier that has a bigger scale than your company except you have no options.