It's tax time, and when that time of year comes around, I start thinking about what I can do to hold on to a little more of my hard-earned money. One great way is to invest in a 401K or IRA. These savings plans are funded with pretax dollars. The taxes on the money invested, along with any capital gains, dividends, and interest, are deferred until the funds are withdrawn.
As important as these things are, they're not the only benefits. There's also the flexibility and customizability — the ability to review how the funds in these accounts are invested and make changes to balance the portfolio and improve the return on investment.
Why is this a topic for an independent supplier's blog? It occurred to me that a manufacturer's list of approved suppliers is a little like the list of stocks, bonds, mutual funds, or other assets in a 401k or IRA. You want to be sure your personal portfolio is giving you the best ROI possible. The same is true for the portfolio of preferred independent suppliers your business maintains.
Those suppliers are business assets, just as the investments in your 401k or IRA are personal assets. And it's just as important to pay attention to those assets, look at them from time to time, and make adjustments. If you don't, you may not be getting as much from them as you could.
I can think of some questions you can ask to evaluate your preferred independent supplier list:
- Do all your suppliers offer the lowest risk — or at least substantially lower risk when you need obsolete or hard-to-find parts? When did you last review the list?
- How are the suppliers testing and screening to be sure the parts they supply are authentic and of the quality you require?
- Are these suppliers accessible? And is it easy to do business with them?
- Do they offer more than just order taking? Can you count on them for innovative ways to meet your needs?
- If you have suppliers that aren't meeting your expectations, can you fix the relationship, or should they be removed from the list?
- Do you need to add more independent distributors to your preferred list to balance your portfolio?
I'm sure you can come up with more questions. The point is that this kind of checkup is important, whether you do it quarterly, semi-annually, or annually. If your preferred distributors all measure up, that's great! But even if they do, checking your supplier portfolio may bring to light a deficiency that adding a supplier can eliminate. And if there's a problem with a supplier, a regular look at what's going on can nip that problem in the bud before it turns into a loss for your business.
What are you doing in your company? Are you checking and adjusting your preferred supplier list regularly to be sure the companies are meeting your needs as well today as they were when the relationship stated? Do you know what each one brings to your business and where you may have holes that need to be filled?
Is your preferred supplier portfolio strong and balanced, or do you need to make a tweak or two? I look forward to reading your thoughts.