{"id":337,"date":"2022-11-29T15:41:04","date_gmt":"2022-11-29T15:41:04","guid":{"rendered":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/?page_id=337"},"modified":"2023-03-21T12:40:22","modified_gmt":"2023-03-21T12:40:22","slug":"suppliers","status":"publish","type":"page","link":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/suppliers\/","title":{"rendered":"Suppliers"},"content":{"rendered":"

Factors to consider when choosing a suitable supplier<\/span><\/h2>\n

Price<\/strong> <\/span><\/h2>\n
    \n
  • Is the price affordable and offering value for money<\/strong>?<\/li>\n
  • Does the supplier offer price discounts<\/strong> <\/span>for bulk orders or setting up a contract?<\/li>\n
  • Does the supplier offer free delivery<\/strong>?<\/li>\n<\/ul>\n

    Why is Price Important?<\/span><\/strong><\/p>\n

      \n
    • If the cost of materials is too high, the price of finished products will increase and may become uncompetitive.<\/li>\n
    • An organisation must be able to cover its costs and make a profit.<\/li>\n<\/ul>\n

      How is Price Influenced?<\/span><\/strong><\/p>\n

      Influenced by customer expectations:<\/p>\n

        \n
      • If the product is bespoke, then high price materials are to be expected.<\/li>\n
      • They should still be \u2018value for money\u2019 in relation to quality<\/li>\n<\/ul>\n
        \n

        Quantity<\/strong><\/span><\/h2>\n
          \n
        • Is the supplier offering raw materials of a standard that is fit for the purpose<\/strong> required<\/li>\n<\/ul>\n

          Why is Quantity Important?<\/span><\/strong><\/p>\n

            \n
          • The quality of the finished product depends on the quality of the inputs and must reflect customer expectations and the price being charged.<\/li>\n<\/ul>\n

            How is Quantity Influenced?<\/span><\/strong><\/p>\n

            Influenced by the desired image, and expectations of the target market.\u00a0 This would be less important if producing a product for a budget market.<\/p>\n

            \n

            Location of Supplier<\/strong><\/span><\/h2>\n
              \n
            • How far away is the supplier from the organisation (physical distance)?<\/li>\n<\/ul>\n

              Why is Location of the Supplier Important?<\/span><\/strong><\/p>\n

                \n
              • The further away the supplier, the longer the lead-time and the greater the chance delays or damaged to inventory.<\/li>\n
              • Environmental issues may arise with suppliers located overseas and\/or in third-world countries.<\/li>\n
              • The organisation may end up paying higher delivery charges.<\/li>\n<\/ul>\n

                How is Location of the Supplier Influenced?<\/span><\/strong><\/p>\n

                  \n
                • Influenced by the predictability of demand, and capacity to store.<\/li>\n
                • Customer expectations may be relevant e.g. some customers prefer to buy local produce to lower carbon emissions from food miles.<\/li>\n
                • Others may want to buy only from a Fairtrade supplier.<\/li>\n<\/ul>\n
                  \n

                  Lead Time<\/strong><\/span><\/h2>\n
                    \n
                  • What is the period of time between an order for materials being placed and the materials being delivered.<\/li>\n<\/ul>\n

                    Why is Lead Time Important?<\/span><\/strong><\/p>\n

                      \n
                    • The further away the supplier, the longer the lead-time and the greater the chance delays or damaged to inventory.<\/li>\n
                    • Environmental issues may arise with suppliers located overseas and\/or in third-world countries.<\/li>\n
                    • The organisation may end up paying higher delivery charges.<\/li>\n<\/ul>\n

                      How is Lead Time Influenced?<\/span><\/strong><\/p>\n

                        \n
                      • Influenced by the predictability of demand, and capacity to store.<\/li>\n
                      • Customer expectations may be relevant e.g. some customers prefer to buy local produce to lower carbon emissions from food miles.<\/li>\n
                      • Others may want to buy only from a Fairtrade supplier.<\/li>\n<\/ul>\n
                        \n

                        Reliability\/Reputation<\/strong> <\/span><\/h2>\n
                          \n
                        • Will the supplier consistently deliver the right quantity and quality of materials in the agreed<\/u> <\/span>time scale?<\/li>\n<\/ul>\n

                          Why is <\/span><\/strong>Reliability\/Reputation <\/strong><\/span>Important?<\/span><\/strong><\/p>\n

                            \n
                          • Production may get behind schedule, causing missed deadlines, resources lying idle and dis-satisfied customers if kept waiting for the product.<\/li>\n<\/ul>\n

                            How is Reliability\/Reputation Influenced?<\/span><\/strong><\/p>\n

                              \n
                            • Level of reserve inventory the organisation is holding.<\/li>\n
                            • The organisation may be willing to hold more reserves in return for the lower prices of less reputable suppliers.<\/li>\n<\/ul>\n
                              \n

                              Quantity<\/strong><\/span><\/h2>\n

                              Can the supplier respond to a sudden increase in demand for raw materials?<\/p>\n

                              Why is <\/span><\/strong>Quantity <\/strong><\/span>Important?<\/span><\/strong><\/p>\n

                              If there was a sudden surge in demand e.g. if the organisation is in a growth market, the supplier must be able to respond to a larger than usual order at short notice.<\/p>\n

                              How is Quantity Influenced?<\/span><\/strong><\/p>\n

                              If the organisation can hold a reserve of non-perishable inventory, this may be less important.<\/p>\n

                              \n

                              Supplier Credit Terms<\/strong><\/span><\/h2>\n
                                \n
                              • How long a period of trade credit is being offered?<\/li>\n<\/ul>\n

                                Why is <\/span><\/strong>Supplier Credit Terms <\/strong><\/span>Important?<\/span><\/strong><\/p>\n

                                  \n
                                • Longer periods of credit help cash flow management allowing time to produce and sell before paying the supplier.<\/li>\n<\/ul>\n

                                  How is Supplier Credit Terms Influenced?<\/span><\/strong><\/p>\n

                                    \n
                                  • Influenced by the cash flow situation, and length of time taken to sell the finished product.<\/li>\n
                                  • The amount of inventory being purchased at once eg a larger amount may need a longer period of credit.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

                                    Factors to consider when choosing a suitable supplier Price Is the price affordable and offering value for money? Does the supplier offer price discounts for bulk orders or setting up a contract? Does the supplier offer free delivery? Why is Price Important? If the cost of materials is too high, the price of finished products […]<\/p>\n","protected":false},"author":79984,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-337","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/337","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/users\/79984"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/comments?post=337"}],"version-history":[{"count":1,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/337\/revisions"}],"predecessor-version":[{"id":338,"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/pages\/337\/revisions\/338"}],"wp:attachment":[{"href":"https:\/\/blogs.glowscotland.org.uk\/glowblogs\/n5businessmanagement\/wp-json\/wp\/v2\/media?parent=337"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}