Speaker 1: Hello and welcome to another exciting lesson of module 2. In this lesson we're going to discuss what supplier selection is and how to do it as a procurement professional. Supplier selection is the process of evaluating and choosing the most suitable suppliers to fulfill the procurement needs of an organization. It is a critical step in the procurement process as it directly impacts the quality, cost and overall success of a project or operation. The supplier selection process is needed to ensure that the organization's partners with reliable, competent and trustworthy suppliers who can meet the specified requirements and deliver value. By carefully selecting suppliers, you can mitigate risks, optimize supply chain and achieve desired outcomes. In a nutshell, supplier selection is your secret weapon to finding the perfect procurement partner. Now let's discuss the factors that you have to consider when selecting a supplier. First, you must consider the price. When it comes to procuring materials, every organization wants to strike the perfect balance between value and cost. We all love a good deal, right? To ensure you're getting the best bang for your buck, it's important to seek multiple bids. Don't settle for the first offer that comes your way. Keep your options open and explore different suppliers. Here's a tip. Be cautious of suppliers with significantly lower prices than others. While it may seem tempting, there's a chance that their quality might not meet your standards. And guess what? You might end up paying more in the long run for repairs or replacements. It's crucial to clearly communicate your requirements to potential suppliers. Don't be shy about stating what you need. Remember, it's not just the price tag. Stick to your objectives and make sure your specifications are met. Furthermore, carefully read the quote or proposal from suppliers. Sometimes there are sneaky hidden fees lurking in the fine print. Nobody likes surprises when it comes to costs. If you're dealing with complex contracts, it might be worth investing in an attorney to review all the details and ensure everything is in order. Second, you must check the quality. We all know that price plays a big role when choosing a supplier. After all, who doesn't love a good deal? However, if the quality of the materials is poor, it can cause some serious trouble. So, it's essential to take a step back and carefully evaluate the quality before making a decision. If possible, ask the supplier for same samples after their previous work. This way, you can get a first-hand look at the materials and see if they match up with your requirements. Third, consider their customer service. The customers won't lie about the experience they have with your potential supplier. You can ask their previous customers about their experience, especially the service of the vendor, after the sale. You can use the internet and your network to find some reviews of your potential vendors. People who have poor customer service may vent their frustrations on the internet. Uncovering this may give you insights if this is the right vendor for you. Fourth, you must do a background check to know their reputation. When it comes to choosing a supplier, it's important for your organization to know if they uphold high ethical standards. After all, you want to partner with suppliers who share your values and principles. One friendly tip we have for you is to do a little online research. It's like doing a quick background check to make sure any suppliers have a clear record. By taking this extra step, you're not only protecting your organization's reputation, but also maintaining a strong stranding with your loyal customers. They trust you to make responsible choices, and choosing ethical suppliers is definitely a step in the right direction. Fifth, you must check the production capacity of a supplier. It guarantees their ability to meet your business quantity and timeline needs. By evaluating their resources, equipment, and capabilities, you can assure suppliers can handle your orders effectively. This reduces the risks of delays, bottlenecks, or quality problems. Selecting a supplier with enough production capacity ensures a seamless and uninterrupted flow of goods, enabling your business to meet customer demands and maintain operational efficiency. Sixth, check their technology and innovation. Choosing suppliers that embrace advanced technology and innovation is essential as they are typically more efficient and productive. These suppliers can provide faster product delivery, uphold superior quality standards, and contribute to a seamless supply chain. The last factor that you need to consider is recommendations from other people or businesses. In situations where you find yourself faced with multiple suppliers that appear to be equally qualified, leveraging the power of word of mouth can be an effective strategy, which I also use myself. Seeking recommendations and opinions from trusted professionals and businesses in your industry can provide valuable insights into the reputation and performance of the suppliers you are considering. By tapping into their experience and expertise, you can make more informed decisions. You can use this template to be guided by the criteria that you need in order to select a supplier that suits you and your organization best. I used this one myself in the period that I worked as a procurement manager to list down all the important variables that were needed for my organization in the cooperation with suppliers. And that's it. In this lesson, you learned about the importance of supplier selection and the factors to consider when choosing the right suppliers in your organization. I hope that the template that we have provided you can help you evaluate and select the right supplier. Later in this module, we will teach you how to evaluate offers from suppliers. See you in the next lesson.