5 C'S OF SUPPLIER EVALUATION FOR SMALL BUSINESS

Operations management plays a vital role in business. Many activities are associated with operation management; one of the most important among them is procuring tools, raw materials, machines, etc., to ensure the timely production of goods. While performing the procurement process, the business must be cautious about who it chooses as an ideal supplier.

5 C'S OF SUPPLIER EVALUATION FOR SMALL BUSINESS

Here are 5 C’s for evaluating suppliers.

• Competency

The first and foremost factor to be considered is competency, i.e. Is the supplier capable enough to fulfil your business's requirements? To assess a supplier's competency, you can speak with other customers, assess his capabilities based on past performances, and assess his goodwill in the industry. Along with these things, you must visit the supplier personally and gain an understanding of his potential.

• Capacity

Small businesses only demand small orders in bulk; they prefer ordering small quantities more frequently. In such a scenario, you must analyse the suppliers' capacity to determine whether they can deliver the products quickly according to your requirements. The capacity of the supplier can be assessed by examining the supplier's working conditions, human resources, financial position, and many other factors. To gain a deeper understanding, engage in a few trial orders with the supplier.

• Cost

While choosing suppliers, you might encounter 10 to 15 whom you think you could deal with. After evaluating them all, you might reach at least 2 to 3 suppliers from whom you would choose your final supplier. While selecting the supplier, you must consider the cost at which the goods are being supplied. However, price is only one of the critical factors.

• Commitment

A supplier needs to be committed to the quality of the goods and timely delivery. You can speak with his previous customers to assess the supplier's commitment.

• Communication

Whom to contact? How to contact? When will you get the response? All these questions play an essential role in a business environment. Before entering into a relationship with the supplier, the mode of communication must be as clear as the sky on a sunny day. This helps to build a long-term relationship between the business and the supplier, ultimately benefiting both.

A good supplier maintains a balance between commitment, capacity, cost, commitment, and communication. A single missing factor could lead to discrepancies in operations management. Be careful, take plenty of time, but in the end, choose the best supplier.