Saturday, September 27, 2008

Assesing the Credential of Suppliers

This is one thing we, as procurement professional, have to do in every step of signing a new contract agreement and procurement activity. Every contract agreement has it's own importance in term of essence of time and cost factor. Same is applicable in the case of procurement of any kind.

It is very important to asses the background of supplier or contractor, so that you accomplish the main objective of procurement. We have to remember that every requirement or project has it's own time frame. Main objective should be to complete procurement proceeding within the time period and that too in optimum cost.

Few checklist, which may be followed while entering a contract or purchase are highlighted below
  • Expertise in the given area. You can not expect everybody to have expertise in all areas. That's why there areas of functions like Electrical, Electronics, Instrumentation, Mechanical, Process, etc. One should honour on the specialised fied only.
  • Profile need to studied as per the requirement of the contract.
  • Past project or supply record need to studied. You can get the same from the client list of the party.
  • Need to study the economical factor. You need to negotiate without compromising the technological factor.
  • Time factor is also one such factor you just can't compromise. Though the supplier is excellence in the given sector; but if they can't complete or commit as per the time frame specified for the project, it's pointless to honour the same to them.
If we take above factors into consideration, there will be limited room for making a mistake in selecting suppliers. But, we have to make it it sure that dealing in commercial terms always try negotiate safely so that the clients do not take undue advantage.

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