Consequences of Selecting Wrong Supplier

1,599 Published by admin 09 03,2018

The consequences of supplier selection errors can be analyzed from a short-term and long-term perspective.

Consequences in the short-term

The Quality of Commodities is not up to Standard.
Customers are unable to purchase suitable quality products. Although the quality is too low, the purchasing cost is low, but the total cost of the enterprise will increase. Because unqualified products in the process of putting into use, often affect the continuity of production and the quality of finished products, these will eventually be reflected in the total cost.
Excessive quality does not mean that purchased goods suitable for enterprise production, if the quality is too high, far exceeding the quality of production requirements, for enterprises is also a waste.
Total Cost Increase
Low purchasing price is an important condition for selecting suppliers. But the lowest price supplier is not necessarily the most appropriate, because if the product quality, delivery time can not meet the requirements, or because of the geographical location is too far to increase transportation costs, will increase the total cost.
Delayed delivery
Suppliers can not organize the supply according to the agreed delivery time and delivery conditions, which directly affects the continuity of production.
Poor Overall Service Level is .
The overall service level of the supplier refers to the ability and attitude of the supplier to cooperate with the purchaser. The main indicators to evaluate the overall service level of suppliers are the following aspects. If the purchaser does not know how to use the goods purchased, the supplier is responsible for training the purchaser in the use of the products sold.
Supplier does not sell knowledge of products to purchaser training.
There is no follow-up installation service, which increases the time for the purchaser to put the equipment into production or to put it into operation.
No free maintenance service is provided. In this way, the supplier will ignore the quality of the product and no quality problems will arise.
No reliable technical support services: If the supplier does not provide the corresponding technical support to the purchaser, it will not be able to solve technical problems for the purchaser.

Consequences in the Long-term

Imperfect Internal Organization of Suppliers
If the supplier organization is in disorder, the efficiency and quality of purchasing will be reduced, and even the supply activities can not be completed in time and high quality because of the disputes between supplier departments.
Incomplete Supplier Quality Management System
The supplier has not adopted the corresponding quality system, the quality and management has not passed the IS09000 quality system certification, or the internal staff has not completed all the work according to the quality system, and its quality level can not meet the internationally recognized requirements of IS09000.
Backward Internal Equipment, Poor Maintenance Condition of the Supplier
The supplier’s old machinery and equipment, poor maintenance, we can see that the management of the production machinery, product quality, and internal management chaos. The supplier simply can not produce qualified products.
Unstable Financial Position
If the supplier’s financial problems, turnover failure, will affect the supply and then affect the production of enterprises, and even a serious crisis of shutdown.

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