How to properly identify and select your suppliers during your calls for tenders?

Your specifications are written, you are now ready to share them and begin identifying potential partners. Do you know the 3 priority points you must keep in mind to properly identify and select your suppliers?

Study the market

A good knowledge of the market is fundamental for a buyer. Different sources can be used to gather information: the internet, professional networks (colleagues, experts, industry federations, the CNA, etc.), economic information databases, trade shows or conferences, etc. It is also possible to add to your “investigation” the elements of an RFI (Request For Information, or “non-binding consultation”).

Porter’s matrix is a very useful tool to structure and summarise your market study on a purchasing family. Below is an example:

The notion of a market maturity cycle is one to keep in mind: suppliers will not have the same profile or the same characteristics in a market that is in a launch, growth, maturity, or decline phase.

A market is structured according to competitive forces. As a buyer, you must keep these forces in mind in order to properly position your call for tenders and your search for suppliers, before committing to a long-term relationship. Thus, you must identify potential new entrants and potential substitute products (existing or coming in the near future), and you must be aware of the regulatory constraints to which your purchases and your products will be subject.

Use pre-selection and selection criteria

Managing the choice of a supplier is a lengthy process that may require multiple stages. To reach a result, this process must translate into a progressive reduction in the number of vendors on your list. Depending on the nature of the good or product to be purchased, its complexity, its strategic rank and the amount of the expenditure to be committed, this process can sometimes take many months.

As the funnel narrows, you must define pre-selection criteria. These criteria may be requested across different areas of the company, and you, as a buyer, must define the importance of each criterion and your needs in that area. This yields a table that you can fill in to evaluate all the companies from your sourcing, before determining which ones you will consult for the call for tenders. This will naturally prevent you from consulting companies that, at a later stage, might turn out to be “outside the criteria” in the shaping of the final choice.

Example of a pre-selection table:

At the end of the call for tenders, when only a few suppliers remain who have passed all the pre-selections, the final selection will be made on the basis of specific and differentiating criteria. It is strongly recommended to establish these criteria before launching the call for tenders in order to avoid any risk of revision during the project.

Systematise best practices

• Always listen and respond to a supplier;
• Give the reasons for a selection or non-selection (respect the supplier’s effort);
• Keep to the schedule. In the event of a slippage, inform and explain;
• Build the evaluation grid with the internal clients;
• Regularly inform your internal clients and management of the progress of the call for tenders;
• As far as possible, visit the supplier’s site, especially the one or those that present the best potential;
• Preserve confidentiality