Talking about construction materials suppliers is one of those subjects that, depending on people’s points of view, generates real debate or is quickly resolved because everyone agrees on one thing: "They’re all the same anyway." Or something to that effect.
Sometimes, the question "who do you buy from" sparks praise for a particular company. That is, of course, a good thing: happy customers who recommend a product or company are the best forms of promotion a company can have. It’s just a shame this doesn’t happen very often.
But what have happy customers got to do with suppliers? Well, everything. Your supplier is a resource to help you sell more and keep your customers loyal. And not all suppliers are the same, just like resellers. What sets them apart is the added value they bring to your company.
A reseller of construction materials is themselves a supplier of products and services, one aiming to become the “best” supplier for their customers. In order to do so, it’s vital that they create a partnership that mutually benefits both sides. This will have an impact on the prices you can command and the quality of service you’ll receive in the future – in turn, this will dictate the quality of service you can offer your own customers.
So how can you identify your ideal supplier?
By creating a system to evaluate, verify and revaluate your suppliers. It’s probably something you’re already accustomed to doing, but we’ve put together some tips to help turn your instincts into a standardised comparative method in just a few simple steps.
First up, undertake an analysis of construction materials suppliers
1) The fundamental requirements – the things that really count
Establishing these requirements is nothing more than answering the following question: what does my ideal supplier look like?
My ideal supplier is one who:
- instantly knows what I need,
- charges me the lowest price possible,
- gives me the best payment terms possible,
- delivers the materials within ten minutes, with no added costs.
This is the kind of supplier we would all like to have. In the real world, of course, we need to look at other quality standards.
Usually, there are five key evaluation areas:
- Price/cost, including payment methods
- Production capacity and delivery times
- Product quality
- Response times and request management
Draw up a list of the key elements in each of these categories and create a rating system (bad, average, good, excellent, or use stars or a score out of five or ten etc.).
2) Evaluating and classifying suppliers
If you’ve been active for a number of years, you’ll have a relationship with multiple suppliers and it may take too long to undertake a detailed evaluation of all of them. Start by classifying the suppliers and only go into in-depth analysis for these who have a big impact on your business. A typical classification would look like this:
- Suppliers of most-used products/services
- Frequent or long-standing suppliers
- Reliable suppliers with conditions (i.e. suppliers who you believe provide good quality in main areas, but fall short in a few others);
- Suppliers not in use
- Unreliable suppliers
- New and potential suppliers
3) Evaluation system
Prepare a questionnaire whereby suppliers are given a score and their performance evaluated and get your staff to fill it out periodically (every six months to a year).
- Questions can be on a range of subjects:
- Product/service compliance with technical specifications
- Observance of delivery terms
- Quality of product/service supplied
- Availability of documentation on the product (particularly with regard to EC marking and Declaration of Performance (DoP) and/or process (especially ISO9000 certification)
- Completeness of documentation supplied
- Price/price difference in comparison with other products with the same characteristics
- Payment terms
- Availability and skill of sales personnel (agent or executive)
- Availability of after-sales support.
Other areas of evaluation might include:
- Exclusivity agreements around products supplied
- Availability for urgent tasks
- Local availability
- Technical assistance
- Economic/financial capacity
- Size of product range
4) Next steps
Now that you’ve done your evaluation, you have the information you need to decide what you’re going to do next. A high-scoring supplier should be rewarded with additional work or orders – the benefit is mutual. On the other hand, you could contact low-scoring suppliers and try to find a way to improve issues or, if there is no other option, take your business elsewhere.
Launch new collaborations
The questionnaire you’ve put together has helped you to identify the key attributes a supplier needs to have to help your business – an exclusive product, a certain level of service when it comes to delivery and logistics, a big range, set transport costs and so on. You can use this information to broaden your commercial relationships and find new suppliers.