As your business grows, so do its needs. This is especially true for an enterprise that is exhibiting solid growth and making strides within its market segment. The increased demand for your products may be heartening, but handling the supply chain of a growing business can sometimes be overwhelming.
Finding the right supplier who can meet your growing demands can earn you more profits in the long run. But with a bevy of stores raring to get a piece of your business, how do you choose the right fit? Entrepreneur.com.ph talked to supply chain manager Edna Villacrusis of logistics and manpower provider TopServe Services Inc. and Patricia Besinga of Prestige Labels Co., an outsourced supplier of retail products.
[related|post]1. Do a background check on prospective suppliers
Ask people you know about the suppliers they trust. Check out their company profiles, their client rosters, and more importantly, their reputation in the market. Spotting red flags early can help you avoid headaches as you go along.
“Make sure your supplier has sufficiently strong cashflow to deliver what you want, and on time. This can also help ensure that they won’t be out of business when you need them,” Villacrusis said.
2. Discuss all terms and conditions before signing anything
Another factor you should work on is getting a guarantee of reliability and speed of delivery, making sure to include this in the terms of reference on your Memorandum of Agreement (MOA). While business wisdom often dictates that we try and get the cheapest deal out there, this may cause you to settle for an inferior service provider to the detriment of your business. Delayed materials are a business killer.
Besinga advises entrepreneurs to agree on service levels hammer out all things that pertain to performance metrics before signing up with a supplier. This will ensure that all your bases are covered, and expectations are set early on.
“It\\\'s always a good idea to agree on performance metrics like target delivery schedules, and turnaround time before you start trading so you know what to expect from your supplier and vice versa. Level with each other, so you can start building trust which is crucial to this segment of the business,” she said.