Approved Supplier List
In most instances, the purchasing department maintains a list of approved suppliers which would be qualified to supply materials or services. The qualified source lists are a good place to start as both organisations know what to expect by each other. When an approved supplier list is not available the purchaser needs to begin a search to find a supplier and then qualify them.
Search
Another common process is the searching of previous and present purchase orders and contracts. This might highlight the details required for the purchase. Other search methods include research using trade journals, industry magazines, sales representatives, other purchasing professionals and many other sources.
Qualifying
Each supplier goes through a qualifying process to make sure that it can perform as required with the right product, at the right time, in the right quality, in the right quantity, for the right cost. Qualifying suppliers include verifying financial stability, product performance, references and reputation, past delivery performance and many other criteria.
Making the deal
Of course, the procurement team must negotiate the best possible deal for their business with any supplier they decide to work with. The deal will need to include much more than price! Service levels, penalties, quality standards and many other vital factors will need to be agreed on. Once this is done, the procurement department can give the go-ahead for the supplier(s) to start supplying!