"Many are called, few are chosen" You will agree with me that this is often the case when selecting supplier(s) for a procurement project.
The success of any procurement project is hinged on whether or not the right suppliers are selected by the buyer.
Depending on the project at hand, some suppliers will be more suitable than the rest.
And this is why a Procurement Manager should take the time to evaluate all of the bids carefully, to make a well-informed decision.
Your supplier selection process will become much more seamless once key procedures are established and implemented.
Here are some important steps to take to select the right supplier through a bid process;
📍Define Your Needs: This is a very important pre-bid step, you need to have a good understanding of the goods and services that your organization requires, as this will help you to identify the most appropriate suppliers to invite to bid.
📍 Perform Market Research: You need to perform market research to assess the current availability of the goods or services you wish to procure and identify potential suppliers. This will help you develop a shortlist of potential bidders.
📍Create a Request for Proposal (RFP): An RFP is a document that outlines the specific goods or services that your organization requires, the criteria that suppliers must meet to be considered as well as the commercial conditions on which the quotes should be based.
📍Create a Scoring System: Create a scoring system that will enable you to objectively evaluate suppliers' financial standing, technical ability, and capacity; focusing on criteria that are most critical for the particular work and important to your organization.
📍 Assess The Bids: Once you have received bids from suppliers, assess them against the criteria outlined in the RFP. This will help you to identify the most suitable bid for your organization.
📍Perform Site Visits: Site visits to potential suppliers' facilities will give you a firsthand view of their available equipment/machinery, and staff strength. It will also give you a firm grasp of their capabilities and assurance that they can meet your organization's needs.
📍Review The Supplier's Reputation: Especially when utilizing a supplier for the first time, it is wise to perform due diligence. Contact references provided, and ask key questions about the supplier, to find out any potential risks, such as prior noncompliance and environmental violations. This will help you to identify any red flags and make an informed decision.
📍Assess the Commercials: Evaluate the cost-benefit of each supplier’s proposal and consider the total cost of ownership (TCO) of the product or service. Focusing on TCO as against only the purchase price of the product or service will help you select the most cost-efficient supplier.
📍Make A Decision: Once you have evaluated all of the bids taking cognizance of both technical and commercial considerations, make the final decision on which supplier to award the contract to.
By following the outlined steps, you can be sure to choose a suitable supplier for your procurement project which will in turn generate optimal results for your organization.
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