6 Warning Signs of a Bad Supplier

by Nicolette Emmino

As supply chain and procurement professionals, you’re always looking for the “best” supplier. The ones that are going to communicate with you, offer great performance metrics, and, as an added bonus, some low prices.  You’ve probably read a lot about what you should be looking for in a supplier, but now it’s time to explore the characteristics that should make you question a supplier’s efficiency.

Procurement professionals can take all the required measures to choose a good supplier and receive quality products, but even then, it can be challenging to find a reliable supplier.

Unexpected twists in the supply chain cause some serious problems. You can blame a misfiled document, a poor quality product, a delayed shipment, and lack of experience for delivering products. All these things are not going to work in your favor. Therefore, it is important to consider the warning signs to avoid costly mistakes. If your supplier is constantly underperforming, it will directly affect your growth. Instead of continuing with the same supplier, you should dig in and find additional sources and options that will contribute to your company’s success.

If you find that a few (or all) of these characteristics are present in a supplier, better to avoid.

1.  Continuous Poor Service

This is a no-brainer. When your supplier is unable to deliver what you both agreed on, then there is no point of continuing with that supplier. Accidents can happen once. Coincidences can also happen occasionally. But it should not happen always. If it is happening, then this is the time to replace your supplier. In some cases, procurement teams may immediately be aware that low-quality products are being received. If you have any doubts or concerns, consider checking the products to ensure that you are getting the right quality.

2.  Always Talking, But Not Communicating

Some suppliers have a bad habit of talking too much. Too much talking and not a lot of care about the end-product is cause for concern.  If your supplier is one of these, then this is the time to be open about your requirements. Do not trust suppliers who always boast their success.  Instead, ask for references and inquire properly to clarify your doubts. Also, be wary of those who blame others for their low-quality products.

What is the most cause for concern is when there’s not a whole lot of communication going on. Talking is one thing. Communicating is a separate issue. Communication is the foundation of any relationship. This is no different when it comes to supplier relationships that play a great role in the success of your business. When your supplier is unable to communicate effectively, outcomes will suffer. A good supplier should be able to share all the details about the product, delivery, payments, and other requirements.

3.  Delivery Uncertainty

Deliveries should be predictable. You and your supplier should schedule a time for delivery. Popular businesses use the JIT (Just in Time) logistic method to know when the supplies will reach the facility so that they will never be out of the stock. If your supplier is not particular about the timing and fails to meet the schedule more often, then it will affect your business. If deliveries are too late or too early, it will not serve your purpose. You should make it clear that you will not tolerate these uncertainties. If the supplier is unable to change this pattern, then change the supplier without a second thought.

4.  Poor Performance Metrics (or lack thereof)

Whenever you choose a supplier, you should review their performance metrics. Previous service records speak volumes. If the supplier has a bad reputation when it comes to product, performance, and deliveries, then take a step back. Another red flag is if a supplier has no performance metrics for you to review.

5. Poor Location

If your supplier is located in a disaster-prone area, you may want to take this int consideration. Could unpredictable conditions delay deliveries or wreak havoc on your business? While it’s not the supplier’s fault, it still may not be the best fit, depending on what you’re purchasing from them.

6.  Lack of Experience

Experience can only be achieved over time. Experience means suppliers have encountered situations and found new ways to get around challenges to refine skills and processes needed. If the supplier is new and inexperienced, you may be on the edge. Depending on how plentiful the product needed is, perhaps consider industry leaders to avoid untimely deliveries and poor-quality products. This might require a little more effort, but once you find one, you can use their service for a long time to your benefit.

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