In a perfect world, manufacturers could choose their supply chain partners based exclusively on the lowest bidding price. But this may not yield the best products – or the best business partnerships.
How should you evaluate RFPs and, more importantly, choose your suppliers? As artificial intelligence, big data and analytics, and machine learning change the procurement industry, you can leverage these tools to evaluate suppliers.
But the latest technology, while important, isn’t all that matters. Consider these four factors when you evaluate RFPs and bids.
1.Vendor Responsiveness to Provide the Service You Expect
In today’s “always-on” business world, you want to work with suppliers who work as hard as you do – and have the technology to meet your needs 24/7/365. Much of a vendor’s customer service capabilities today are driven by technology.
AI chatbots, automated processing of invoices and purchase orders, and enhanced data analytics so your suppliers can better predict your needs can set organizations apart. But you also want to be able to access real people who can solve problems efficiently and effectively, using technology to help them do their jobs better.
2. Cybersecurity Best Practices to Keep Your Data Safe
Data security goes hand-in-hand with customer service. You want the peace-of-mind that you are working with suppliers you can trust and that their IT department is working hard to keep your financial data safe. Damage related to cybercrime is expected to total $6 trillion annually by 2021, according to some experts.
When you work with a supplier who doesn’t take cybersecurity seriously, you are putting your own data – and potentially your customers’ information that may reside on your servers – at risk. Make sure any supplier you are considering is using state-of-the-art payment methods offering maximum security – or take your business elsewhere.
3. Sustainability So You (and Your Customers) Can Feel Good About Your Choice of Suppliers
Environmental sustainability, which can include everything from minimizing the use of fossil fuels to reducing the creation of toxins during manufacturing, matters more than ever. Sixty-six percent of global consumers stated they are willing to pay more for sustainably sourced goods, according to a Nielson survey. While some suppliers are upfront about their sustainability practices, others may not tout their own accomplishments when it comes to sustainability. Look for suppliers who work in LEED certified buildings, rely on solar or wind power, and choose sustainable manufacturing methods whenever possible.
4.Affordable Pricing Across the Board
In a perfect world, you’d be able to choose suppliers based on price, alone, and be guaranteed exemplary service, secure payments, and partners who support sustainability. But of course, that’s not always the case. And it’s harder than ever to compare suppliers based on price alone, since tariffs, taxes, and levies will greatly affect prices in 2019. Consider sourcing based on supply partners that offer the lowest total cost, not just the lowest purchase price, to ensure you’re getting the greatest value.
How to Decide? Use Big Data and Analytics to Help You Make Your Choice
If there’s one thing each of these four factors have in common, it’s the use of technology in one form or another to streamline procurement, enhance service, and even offer more sustainable manufacturing processes.
Today’s sophisticated, cloud-based procurement platforms help you weigh the factors that matter most so you can build long-term relationships with suppliers whose beliefs and practices align with your company’s mission, vision, and values.