Sourcing-Suppliers

Successfully Sourcing Suppliers for Deals

“It’s hard to find suppliers to provide quotations for us, so we usually ask the same suppliers. However, if we reject the same one too many times, they no longer want to provide quotations for us!”

Procurement teams are constantly tasked with purchasing goods and services repeatedly, often buying similar items multiple times. Yet, most organisations “3 quotations” policy requires them to evaluate quotations from at least 3 different suppliers each time. The exasperation seen above is one we have heard so many times that we have coined the term “Quotation Fatigue” to describe this phenomenon.

The cause of this problem is simple: organisations need to ensure compliance with company policy, so purchasers are always asked to get the magical “3 quotations.”

However, when one supplier is constantly awarded and the other 2 suppliers constantly invited to participate just to make up the numbers, it is no surprise that they eventually decide not to spare the effort.

Striving for successful sourcing means finding a balance between adhering to company policy and retaining good relationships with suppliers. So how can we practice successful sourcing? 

Principles of Successful Sourcing

There are 3 key principles to ensure your sourcing processes are successful.

  1. Open Competition

The “3 quotations” policy has an underlying principle in successful sourcing –competition helps ensure you procure the goods or services at market rate. Allowing more potential suppliers to participate means receiving more qualified quotations that would help you better evaluate the value you will be receiving for your purchase.

However, gathering quotations just to adhere to company policy is not successful sourcing. The number of quotes do not define competition. Rather, the number of eligible suppliers is what drives competition.

  1. Building Relationships

Having respect between buyer and seller builds positive relationships. To cultivate good relations with suppliers, the effort they put into preparing a quotation for your purchase should be recognized and not taken for granted.

Suppliers understand they can’t win every deal, but they want to know that they were given a fair chance. Giving them sufficient time, answering their queries promptly and evaluating their proposals seriously are ways to let suppliers know that you’re a buyer that they would want to work with regularly.

When suppliers are not given enough information to quote accurately, or their questions are left unanswered, it leads to frustration or poor quality quotations, resulting in soured relationships.

  1. Transparency

Being transparent with your sourcing process and purchasing requirement helps to earn trust from suppliers while also ensuring compliance with your corporate governance.

Including as much information possible about the purchase, along with any supporting documents and T&Cs your organisation has will allow suppliers to evaluate and decide if they are able to quote you. Additionally, providing them all the necessary information reduces the amount of questions you may receive from individual suppliers as well.

Practicing transparency also includes sharing relevant information with all suppliers, and updating suppliers when the purchase evaluation is completed.

Get Help with Sourcing

While it could be additional effort to practice successful sourcing, eProcurement platforms like TenderBoard provides you with the tools to ensure that you can source successfully.

When considering eProcurement platforms, look out for these tools that can help your team:

  • Versatile sourcing mechanisms

Your tenders can be as open or closed as you need them to be – choose to limit deals to pre-qualified suppliers, select from a database of suppliers, or anything in between.

  • Supplier management tools

Having a supplier management tool keeps you in control of your supplier relationships – Maintain your approved supplier list, blacklist errant suppliers, monitor supplier invitations and manage clarifications and submissions easily through the platform.

  • Automatic audit trail

All actions performed by buyers or suppliers will be captured on the platform, helping you keep track of your communication and ensure that purchases can be properly accounted for later.

On TenderBoard’s eProcurement platform & B2B Marketplace, you control your purchases and procurement processes; providing automated workflows and assisted sourcing & management tools to help your procurement team achieve successful sourcing.

Come speak with us today to find out how we can help you to source successfully! To see our platform and learn more about our solutions, visit our website at www.tenderboard.biz

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