Using a 3-Tiered Supplier Vetting Process

Companies of all sizes from SME’s to MNC’s frequently approach our firm looking to identify and qualify new potential suppliers in China wince Southeast Asia remains to be an attractive manufacturing hub. In our opinion, having a clear understanding of your foreign supplier requirements and overall sourcing strategy is critical to finding the best potential Asian vendor. With critical questions such as, “What certifications do our foreign suppliers need to hold?” and “What sort of quality control measures do we require in Asia?” answered, the actual process of qualifying a new supplier can begin. To guide this journey, our firm always recommends using a robust three-tiered vetting process, as defined below.


  1. Use a preliminary qualification survey to quickly eliminate poor candidates, such as those that do not hold required industry certifications or are too small to meet your needs. These surveys should be distributed electronically and only take ten to fifteen minutes to complete.
  2. Conduct a telephone interview with pre-qualified candidates to better understand a potential supplier’s management team. Surveys are a great tool to eliminate poor candidates, but actually speaking with key decision makers at potential suppliers helps best gauge interest in gaining your business and desire to collaborate with your company over time.
  3. Conduct comprehensive on-site audit to document manufacturing process from raw materials to finished goods to verify previous qualification data. Trust, but verify…you never know what your company may uncover when auditing a supplier. Whether it is discovering a key competitor also purchases from that supplier, or that their production capacity is significantly less than previously stated, it is always best to discover these issues, before placing orders.


When evaluating which qualified suppliers to add to your supply-chain, always consider selecting suppliers where your business is valued most. In many cases, your company can receive improved pricing and increased influence with smaller suppliers than at readily identifiable best-in-class multinationals.


To learn more about these tips and other ways you can improve the performance of your Asian suppliers, visit ABC University or watch any of our 30 min educational webinars.


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