To ensure regular supply of quality materials at the most competitive rates is the basic purpose of the purchase department. For this, a competent and dependable set of vendors is required.
• Because of the uncertainty in the business environment, dependence on a single supplier for some critical input material or service may prove to be dangerous for business continuity, in case of an emergency situation at the supplier’s end.
• To safeguard against such risk of uncertainty, generally companies buy from at least three (or sometimes more) vendors regularly. The quantum of orders must be divided among these suppliers judiciously.
• To maintain such a reliable set of vendors, the purchase department has to keep watching for and trying newer suppliers in addition to the existing ones.
• To understand the current trend in our supply industry, the businesspeople must visit industry events, exhibitions and conferences. E.g. we may find suppliers of some new machinery, technology, alternative raw material or new processes with newer offerings in such events.
• Internet directories, industry portals or marketplace web sites are also useful in sourcing new vendors.
• Industry directories or magazines and publications are another source of potential suppliers.
• The company must keep analyzing the performance of its existing vendors and rate them as per their performance in terms of efficiency, quality, rates, credit terms, ease of business etc.
• The purchase department must keep in touch with the vendors regularly to ensure healthy work relationships.
(Expert advice to GROW your business wherever you are, whenever you want.
SMEBusinessGuide.com… https://goo.gl/E3pfoQ)
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