Supplier selection: the criteria that matter beyond price
The cheapest quote is rarely the cheapest outcome. Here are the criteria that matter when choosing a manufacturing supplier.
Price is easy to compare, which is why it dominates many supplier decisions. But a low quote from the wrong supplier can end up being the most expensive choice you make. Here’s what else to consider.
Capability. Does the supplier have the process, equipment and experience your product needs? Have they made products like yours?
Quality systems. How do they control quality? What certifications do they hold, and, more importantly, do they follow them in practice?
Capacity and priority. Can they handle your volumes, and will your order get the attention it needs? A small customer at a very large factory may struggle to be heard.
Financial stability. A supplier that runs into difficulty mid-project puts your whole programme at risk.
Communication. How quickly and clearly do they respond? Are problems raised early, or hidden?
Track record. References, history and existing customers say more than a brochure.
Location and logistics. Proximity affects lead times, shipping costs, ease of visits and time-zone challenges. UK and Asian options each have their own trade-offs.
Flexibility. Can they cope with changes, ramp up or down, and support future product variants?
Ethics and compliance. Working conditions, environmental practice and regulatory compliance matter, both morally and for the reputation of your business.
Intellectual property. How will they protect your designs and tooling?
Total cost. Look beyond unit price to tooling, freight, duties, rework, failure rates and management time.
How to check
Ask questions, request samples and speak to existing customers. Above all, visit, or have someone visit on your behalf. A factory audit is the best way to see whether what you’ve been told matches reality.
Choosing suppliers is one of the areas where long-standing relationships and practical experience are most valuable. If you would like help, get in touch.