What is supplier development?

Supplier development process

The supplier development process is a key component of purchasing and supply chain management operations. Here, we discuss four steps for implementing an effective supplier development process.

Evaluate suppliers

When looking for suppliers of goods and services, it's important to evaluate their capabilities. You can evaluate your suppliers from the following perspectives.

Check how long the supplier has been in business. The longer they've been in business, the more reliable they are.

Check their location and select those located in or near the industrial park. Here's a handy tip: If you search for toy figure suppliers on Alibaba, you'll find that over 60% are located in Chenghai, Guangdong. This means that toy figures are produced in this area, and it's easy to find a factory there.

Find out if they create the sample exactly to your requirements.

Let's take stuffed animal customization as an example. You can check if they replicate your design 100%, if each piece is placed correctly, if they use the technique you specified, such as heat transfer to print patterns, and if the sample is of good quality.

If you're not satisfied with the sample, you can request further modifications until it meets your requirements. During the modification process, you can also evaluate whether their attitude and efficiency meet your expectations.

Select several suppliers and choose a reasonable price range, eliminating those with the highest and lowest prices.

Develop a list of potential suppliers

After conducting a sample evaluation, you'll be able to select several suppliers that meet your expectations. You can categorize them by supplier type, which refers to factory size and location, cost, speed of new product development , and so on. You can then choose your preferred supplier from the list and save the others as a backup. You can also place a small order to evaluate their performance.

A comprehensive evaluation of suppliers during cooperation

After the trial order, you can re-evaluate your suppliers by establishing metrics such as on-time delivery rate, defect rate, response speed, etc. You can then eliminate underperforming suppliers and make optimization plans for those you believe have room for improvement.

You can list the issues by level of urgency and prioritize the most urgent ones. If you want to reduce your lead time, you can ask your supplier to find solutions. They could improve team efficiency or develop new processes to address these issues.

Monitoring the result

After implementing the plan, it's important to constantly monitor issues and see if any improvements are being observed. If the optimized results are still far from the expected goals, you can collaborate with another supplier from your list of potential suppliers.