5 steps for effective-supply chain management — Part 2: Supplier Qualification
In the previous blog we discussed the first step for effective supply chain management — Supplier Discovery. It spoke about significance of searching the most competitive supplier for the company and explored different methods for locating a supplier.
We are constantly seeing a number of cases wherein the company’s reputation is tarnished on account of unscrupulous supplier practices. Take the recent case of H&M, a fashion retailer who was asked to sever ties with suppliers sourcing cotton from Uzbekistan where child and adult forced labor is prevalent. This highlights the need to scan the suppliers by introducing a preliminary qualification round.
A qualification round or preliminary screening, helps the companies to judge the credibility of a supplier. Companies can have questionnaire customized as per the project requirement that the shortlisted suppliers have to answer compulsorily after the discovery stage. Based on the responses the suppliers can be rated.
Apart from the questionnaire, suppliers should also be asked to submit various important certifications for instance ISO, audit requirement, company registration etc that are mandatory as per the company’s policy.
A qualification stage is required to weed out the wrong suppliers thereby saving on the valuable resources of the company.
We will discuss step 3 in the effective supply chain management series in the coming blog.
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