Poorly Defined or Inappropriate Standards and the Effect on Supplier Prequalification
May 30, 2016
Any time you align your business with a contractor or supplier, you run the risk of choosing the wrong one. While a contractor may be a separate entity from your business, consumers associate anyone working on your project with your brand and your business. In this way, supplier prequalification can mitigate risks that may have a lasting effect on your business by ensuring that you are working with contractors that are qualified, socially responsible, and safe.
Unfortunately, many companies miss the mark when it comes to supplier prequalification because of poorly defined or inappropriate standards. Here at BROWZ, we believe that these standards should be resolved within the first stages of implementation in order to ensure a successful project for the consumer, your company and your suppliers.
Setting Clear, Appropriate Standards for Contractors and Supply Chains
When standards are clearly defined and appropriate for selecting suppliers and contractors, a quality product is guaranteed for customers, your company lowers risks that are associated with bringing in an outside company to work on a project. One of the most important steps in supplier prequalification is to identify which standards are important to your business, and clearly outline them before you begin looking for contractors.
While keeping your standards simple and clearly defined from the beginning is important, you must first identify what qualities a supply chain must have in order to work with your business. Which qualification standards are most important, and should have prominent focus during the screening process? Your checklist may include:
- Payment terms and prices
- Delivery terms
- Reputation, performance history or industry position
- Organization and management
- Claim policies and warranties
- Financial capability
- Communication abilities
- Geographic location
- Overall impression
Each of these categories/skills can be labeled as most important, of average importance, or least important in order to determine which skills you want your supply chains to focus on. This begins the process of setting standards that are clear and appropriate before choosing a supply chain to work with. Once you’ve determined which standards are most important to your company, you are ready to start the process of choosing a supplier or contractor.
As you set the appropriate standards for your preferred contractors, focus only on things that really matter, rather than just taking everyone through the motions in order to feel good about the final decision. Make the process beneficial by determining exactly what your company values in a third party that represents your brand. Take feedback and input from your team members as you set up selection criteria and determine measurements for important standards.
For example, your company may have more wiggle room in the budget area, and want to focus more on the reputation of a supply chain rather than the cost. On the opposite hand, if you are operating under a tight budget, you may choose a smaller, less known supply chain in order to stay under budget. You may have a negative impression of a company that looks great on paper, and if you weight your gut instinct as heavily important, it may be time to move on to your next option. Regardless of what is important to you and your business, defining these qualities is an essential part of choosing the right supply chain to ensure any project’s success.
How do Poor Standards Ruin the Process?
Companies often make the mistake of using complicated, broad standards when looking for a supply chain. They may use terms such as:
- Always delivers on time
- Easy to work with
- Communicates well
While these are important skills to have, they aren’t clearly defined or quantifiable, making it difficult to weight them in order of importance or determine if a particular contractor has them. What does affordable mean to your company? How do you define easy to work with? What qualifies as good communication in your book? These terms mean different things to different people, and your team members need to understand in a quantifiable way exactly what you expect from a supplier or contractor. Good, clear standards and expectations from the beginning clear up misunderstandings and ensure that everyone is on the same page.
How We Can Help
Here at BROWZ, we take your important criteria and weigh it against what we already know about our prequalified suppliers. We ensure that all supply chains are socially responsible, qualified, and safe before we refer them to you. Once your standards are set and clearly defined, we simplify the process by pairing you with the supply chain that is most likely to meet your needs and lower your risks.
We take the work out of choosing the right contractors and suppliers for your business, and make the process simple and easier for everyone involved. Contact us today to learn more.