[ad_1]
The purchasing department creates and maintains a preferred supplier list to assist with order placement. The process for adding a vendor varies by organization, but typically involves a thorough review process and site inspection. The list is reevaluated every few years and supplier performance is monitored regularly.
In most large organizations, the purchasing department is responsible for building and maintaining the preferred supplier list. This list is provided to purchasing departments and managers to assist with the order placement or purchasing aspect. The primary purpose of this list is to assist buyers in selecting suppliers who have completed a thorough review process.
The process required to add a vendor to the Preferred Vendors list varies by organization. Typically, the length of time required and the type of review are determined by the dollar value of the merchandise. Most businesses have a list of products that you need to purchase on a regular basis. Instead of issuing a request for proposal (RFP) and selecting a vendor, they provide a preferred list of vendors to the staff.
As a bare minimum during this review process, the seller’s legal name and address are identified, along with tax numbers, commodities they offer, or services. Many companies use a rating service, such as Dunn and Bradstreet or industry-specific rating firms, to confirm the legitimacy of the company and determine if there are any known issues with the company.
In most companies, a thorough vendor review is completed before being added to the preferred vendor list. The first step in this process is the submission of a completed application form by the supplier. Information requested may include a copy of a financial statement, volume of materials produced, sources of parties, union affiliations, and a list of company executives.
This information is reviewed by purchasing personnel, who are responsible for ensuring its accuracy. In addition to this information gathering, many businesses require a site inspection. During this process, a member of the procurement department takes a detailed tour of the facilities, meets with staff, and reviews quality assurance procedures.
It’s not uncommon for companies to reevaluate their preferred supplier list every three to five years. The purpose of the inspection is to review any changes to procedures, suppliers and other relevant information. If a company’s product quality decreases, it may be removed from the list.
It is the responsibility of procurement personnel to manage and monitor supplier performance. Reports on purchase activity, invoices, problems and shipments are often collected on a quarterly basis and reviewed. Continued dedication to supplier management is considered good practice in the procurement organization.
[ad_2]