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How to Choose a Supplier for Your Small Business

February 5th, 2013 ::

By Karen Axelton

Are you trying to decide among several suppliers for your small business? To make the decision easier, try tapping into the “10 Cs” model of evaluating suppliers. Originally developed by Ray Carter of DPSS Consultants, the 10 Cs are widely used by companies in all industries. Here’s what they involve:

  1. Competency. How well is the supplier able to do what you ask? What do their other customers think of them and what is their reputation in the business community and your industry?
  1. Capacity. Does the supplier have the capacity to fill the orders you need? This includes not only their physical capacity to produce the product or deliver the service, but also their ability to respond quickly and ramp up rapidly.
  2. Commitment. How committed is this supplier to you as a customer? How committed are they to quality control standards?
  3. Control. Is the supplier in control of its own supply chain or other resources? What backup plans does it have in place in case of disaster or delay? A supplier that relies on independent contractors, for example, has less control than one that has a full-time staff.
  4. Cash. What is the supplier’s financial situation? Look into their credit rating and their history of delivering on time. You want to make sure they’re adequately capitalized to deliver.
  5. Cost. Cost is a key factor, but keep in mind that low cost alone shouldn’t be your deciding factor. Paying more may be worth it to get a more reliable or higher-quality supplier.
  6. Consistency. A good supplier has processes in place to ensure consistent quality. You may want to visit the facility and see the production process or ask for product samples.
  7. Culture. Ideally, a supplier’s cultural values should match with your own. For example, if your business is focused on high quality, a cut-price supplier who’s focused on the lowest possible price is not a good match.
  8. Clean. This refers to the supplier’s environmental sustainability, which can be very important depending on your product, your company’s image and your customer base.
  9. Communication. Find out who at the supplier company will be your point/s of contact, how frequently they will update you, and how you will be able to contact them. You don’t want to get stuck unable to reach your supplier in an emergency or left in the dark about a problem with your order.

One way to use the 10 Cs is to create a spreadsheet and rate each supplier in each category on a scale of 1 to 10, with 10 being best. The supplier who comes closest to a perfect score of 100 would be the one you pick. If some criteria matter more than others, you can rate those more heavily.

Image by Flickr user jontintinjordan (Creative Commons)

 

The views expressed here are the author's alone and not those of Network Solutions or its partners.

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