I wanted to notify you of the results of my investigation on specific criteria for the selection of the vendor. Choosing a vendor is one of the critical problems in managing the procurement of material and technical resources and services. From the variety of potential suppliers of goods and services, it is essential to choose the most effective, profitable, and reliable one. Therefore, the list of potential counterparties must be analyzed according to individual criteria that I have presented in this memorandum. The number of criteria should not be limited by the price and quality of materials only, and criteria based on equipment and services can range from three to dozen. However, here are the five most crucial criteria for choosing a vendor that I found to be most effective.
- Quality of supplied materials. This criterion should be a priority to a business that makes it a goal to provide and attract customers with the best products on the market. After all, the quality of the products determines the customers’ satisfaction with the purchase and encourages them to choose the company over its competitors (Kartsonakis et al., 2019). Therefore, it is possible to conclude that the quality of the products directly influences the customers’ loyalty.
- Operational factors like the reliability of delivery, along with the compliance for the established schedule. Before choosing a vendor, it is necessary to specify the issues of logistics and transportation immediately. Vendors that are convenient in terms of logistics and timing can prove to be very beneficial to businesses, especially with limited resources, like time and finances (Alizadeh et al., 2016). Many questions can arise in the process, including, whether loading and unloading will be included in the total cost, is there a quick delivery, in case it will be suddenly needed, and many more.
- Financial conditions, including price, discounts, installment payment and credit, and financial stability of the vendor. Once again, this criterion is extremely important to the businesses, which have a priority to seek to minimize their costs and expenses and maximize the profit. Moreover, it can prove to be extremely convenient in terms of long-term and prospective partnership.
- The ability of the vendor to meet requirements, including output volumes, a wide assortment of supplies, used equipment, availability of warehouses, and supply control. The availability of offices and storage facilities is especially crucial in finding a potential vendor (Romule et al., 2019). At first glance, it might seem that this is not very necessary, because the main thing is to bring the order promptly. However, on the other hand, if the selected vendor does not have its warehouse, this means that the received products may be collected from the warehouses of other companies. This may become a problem when ordering many products in wholesale.
- Location of suppliers. This criterion can also prove to be very useful when it comes to limited resources, like time and finances. If the location of the vendor is convenient for the company, it will only be beneficial in terms of considering a partnership with this vendor.
The large number and variety of potential vendors of the required material resources lead to the fact that special attention needs to be paid to the issue of choosing those that could most successfully ensure the production and marketing activities of the enterprise. Therefore, the criteria are necessary and should be taken into consideration. It is important to note that only firms with substantial experience in this industry, a well-functioning warehouse, logistics system, office, and qualified staff do their job and can lead to a successful and lasting partnership.
References
Alizadeh, A., Chehrehpak, M. & Ashlaghi, M.J. (2016) ‘A decision support system for vendor selection and quota allocations using dependent and independent criteria’, International Services and Operations Management, Vol. 23, No. 2, pp.201–216.
Kartsonakis, S., Grigoroudis, E., & Neofytou, M. (2019). Supplier Selection and Evaluation Using Multicriteria Decision Analysis. Immunological Tolerance, 187–204. Web.
Romule, K., Bak, O., Colicchia, C. & Shaw, S. (2019), “Supplier performance assessment: Evidence from a UK-based manufacturing company and its suppliers“, Benchmarking: An International Journal, Vol. 27 No. 2, pp. 817-838. Web.