Careers Contact Us
Learn More

What is supplier management and why is it important?

Reliable suppliers allow you to focus on the most important aspects of your business - marketing, sales growth, and product expansions.
Unreliable suppliers, on the other hand, can cost you money – and potentially even your reputation too. Supplier management is vital to your business growth.
A large number of SVI customers came to SVI because they run into problems with their suppliers – shipment delays, poor product quality, high rate defectives, poor communication, testing failures and factory audit failures. Check out our customer testimonials here

In this article, we’ll share our supplier management experience with you. Learn from the below points to better manage your suppliers effectively.

Source more than 1 factory for your project, 3 will be the good number to do a comparison. You will not know if the price is too high or low without comparison. Get company profiles and check their production capacity, quality control processes, as well as their communication efficiency.  If you feel that the factory is slow to reply to your emails at the quoting stage, odds are it will also happen in your product development and production stage. Select a better factory from the candidates, and have a backup factory for urgent needs.

Inspect the factory if you’re working for big retailer projects (Get retailer knowledges here), it is the first step you need to pass, and it will be very painful if you have developed a product in a factory that turns out cannot pass the retailer audit. In this case, you have to source a new qualified factory to restart.

Ask for 3-6 month quote validity, the project lead time can take 3-6 months. Exchange rates and raw materials can change during this period. It is better to lock the price with your supplier, because your buyer won’t allow you to raise your price when placing orders.
Sign approval samples before production, you need a standard qualified product to do inspection comparisonsor to revisit the product when meeting some problems in production. It is also the proof you need to have the factory guarantee the product quality.
Test samples or materials before production, production rework costs time and money, as well as shipment delays. However, often times you find out the product sample cannot pass the testing. Testing samples prior to production is an important step to ensure smooth production.

Ask for a production schedule for your order and track weekly, it is very helpful to keep your production process on track to solve issues on-time and secure on-time shipment.

Inline inspection and final inspection before delivery. The importance of inspection doesn’t need to be emphasized more. It is the keyprocess to do better quality control of your products. Final inspection is required for each production run, and inline inspection can help you catch things earlier.

Each above-mentioned point is essential in managing your supplier effectively. Things can and will go wrong if you underestimate the importance of any of the above points. Supplier management is about the process, details, and high standards for both yourself and the factory.

If this article is helpful, and you need someone to do all the supplier management work for you, check out how SVI can help you with a single point of contact easily.