- Benefits of Supplier Partnerships
- Effective Supplier Management Process
- Basic Supplier Selection Criteria
Performance means receiving inputs (such as data from previous projects, customer’s requirements, raw materials and supplies, employees, infrastructure, etc.) and effectively and efficiently converting them to outputs considered as value by customers.
It’s in our best interest to choose and work with suppliers who provide and insist on high quality.
Supplier performance is not only just a low purchase price:
- The costs of transactions, communication, problem solving and switching suppliers all impact overall cost.
- The reliability of supplier delivery and its keeping, as well as the supplier’s internal policies such as inventory levels, all impact supply-chain performance.
It used to be a common standard to get the supplies for the same raw material from multiple suppliers, over concern about running out of stock or a desire to play suppliers against one another for price reductions. But this has given way, in some industries, to working more closely with a smaller number of suppliers in longer-term, partnership-oriented arrangements.
Benefits of supplier partnerships include:
Partnership agreements and commitments with fewer suppliers mean less variation in vital process inputs.
If suppliers have proven to be effective at controlling their output, they and their product don’t need to be monitored such as closely.
Establishing an effective supplier management process requires:
- Support from the top management of both companies involved.
- Mutual trust.
- Spending more money now to develop the relationship, in order to prevent problems later.
The manufacturing industry is in a special situation: Much of what manufacturers purchase is then incorporated into their products. This means there is a higher natural risk, or potential impact, in the manufacturing customer-supplier relationship. For this reason, manufacturers often develop detailed supplier-management processes.
Many of those same methods have been adapted by non manufacturing organizations. This is especially true of partnerships and alliances, which are becoming a widespread way of sharing expertise and resources — and spreading risk — in a complex global environment.
Download our e-book
Download our free e-book to discover how GQ Interim can transform your business with expert leadership solutions!
How to Choose the Right Supplier?
The criteria for supplier selection for a particular product or service category should be named by a “cross functional” team of representatives from different sectors of your organization. In a manufacturing company, for example, members of the team typically would include representatives from purchasing, quality, engineering and production.
Team members should include personnel with technical/applications knowledge of the product or service to be purchased, as well as members of the department that uses the purchased item.
Basic supplier selection criteria:
- Previous experience and past performance with the product/service to be purchased.
- High level of the quality system, including meeting regulatory requirements or mandated quality system registration (for example ISO TS 16949).
- Problem solving performance.
- Ability to meet current and potential capacity requirements, and do so on the desired delivery schedule.
- Financial stability.
- Technical support availability and willingness to participate as a partner in developing and optimizing design and a long term relationship.
- Total cost of dealing with the supplier (including material cost, communications methods, inventory requirements and incoming verification required).
- The supplier’s track record for business-performance improvement.
- Total cost assessment.
Methods for determining how well a potential supplier fits the criteria:
- Obtaining a financial report.
- Requesting a formal quote, which includes providing the supplier with specifications and other requirements (for example, testing).
- Visits to the supplier by management and/or the selection team.
- Release according to pre-audit.
- Successful audit performance.
- Discussions with other customers of this supplier.
- Review of databases or industry sources for the product line and supplier.
- Evaluation (e.g. prototyping, lab tests, validation testing) of samples obtained from the supplier.
- Validation of PPAP documentation.
Conclusion
Selecting the right supplier in the automotive sector is a strategic decision that requires a thorough, cross-functional evaluation process. By assessing suppliers on criteria such as past performance, quality certifications, problem-solving ability, capacity, and total cost impact, companies can ensure they partner with organizations capable of meeting both current and future demands. A structured selection approach not only mitigates risks but also fosters long-term relationships built on mutual trust, shared goals, and continuous improvement—ensuring that the supply chain remains robust, responsive, and aligned with business objectives.
Interested in Interim Expert?
Discover how interim management can dramatically increase the efficiency of your business. Get in touch with our team to learn how working with GQ Interim will improve your company.
- Get started within few days
- Database of 10 000+ consultants
- Solving crucial problems of your business
- Custom solutions for your business needs
- Proven results with measurable impact
Related articles
- A balanced scorecard example demonstrates how organizations can measure more than just financial performance. Developed by Robert Kaplan and David Norton, the balanced scorecard tracks goals across finance, customers, internal processes, and learning & growth. By aligning these perspectives, it ensures that daily operations support long-term strategy and sustainable growth.
- The Theory of Constraints (TOC) is a structured approach to improving organizational performance by focusing on the single most limiting factor—the constraint. Whether it’s a production bottleneck, market demand, or a sales conversion gap, TOC answers three core questions—what to change, to what to change, and how to cause the change—and drives continuous improvement through five disciplined steps: identify, exploit, subordinate, elevate, and repeat.
- Software quality assurance ensures that software consistently meets stakeholder needs by preventing defects and validating that products align with defined quality attributes (e.g., reliability, security, performance). Blending defect management practices with standards-based quality models like ISO/IEC 25010 helps teams plan, measure, and continuously improve quality throughout the lifecycle.
- During our jobs we meet very often with many symbols and shortcuts or abbreviations e.g. FMEA, PPAP, CC, SC etc. When I did my first internal audit at work I had to also check the implementation of CE marking. Previously I have done the research what is this CE marking to not be absolutely lost in this area. So what is it and how is itused?
