Performing Due Diligence on a Potential Supplier The coverage of any due diligence process will be affected by the cost of the services for procurement, the value of the services to your business, and the risks of the absence or poor performance of such services. However, notwithstanding the size of your business, there are some essential steps you have to follow. Know your needs and preferences. You have to be clear from the start what you are would like to achieve. This will help you see what specifically you need from your supplier, not just as far as their service offering is concerned but also their values and how they treat their customers. Studying the Market
Learning The “Secrets” of Resources
After knowing your wants and needs, you can create a shortlist of possible supplier candidates using a “Request for Information” document (RFI). This outlines briefly the goods and/or services needed and requests information pertaining to suppliers’ competencies and capabilities.
Getting To The Point – Companies
Investigating Probable Suppliers The checklist below will help you assess your prospective suppliers’ capabilities and fit with your business: Business Identity- Find out who you’re dealing with: are they legit and does the person you are negotiating with have the authority to commit the supplier? Financial Background- A supplier with an operating loss, or considerable loss of revenue over the last few years may have underlying problems. Delivery of Goods/Services – Does the supplier’s suggested method of satisfying your requirements fit with your established practices? How do they plan to handle any challenges or difficulties? Are they capable of delivering the promised services for the quoted price? How do they compare with others on this particular aspect? On this account, how do they compare with the others? Quality – Look into the supplier’s credentials and/or industry accreditations. Cost – Compare different suppliers’ quotes. But take note that best value for money isn’t automatically equal to the lowest price. Business age – Longevity can boost your confidence but a newer company may be more innovative in terms of approach and attitude. Track record – Ask for comments or feedback from other clients (you probably know some). Meet with your prospective supplier – Not only is this a good way to see if you can work together but it also offers you a chance to see their workplace, examine samples of service deliverables or witness demonstrations on performing the services. Risk Assessment and Management The moment you appoint your supplier, create a risk register expounding on relevant risks and how to handle them. This may be referred to over the course of the relationship. Selecting Data Processors You may have to share data with your supplier, but make sure they are fully aware of and compliant with existing data protection regulations.