Supplier Selection Criteria
Our regional units use a structured approach to select products from potential suppliers.
This process vary based on region and the type of products involved, but the general process typically includes the following steps:
Needs Assessment:
Regional distribution units constantly identify the needs of certain products and desires of local consumers.
Product Discovery:
The central purchasing team is actively selects products that can fulfill the identified needs.
Supplier Evaluation:
Before selecting a supplier, central purchasing team evaluates potential candidates based on criteria such as:
- Production capability
- Quality control processes
- Scalability
- Delivery lead times
- Cost structure
- Compliance with regulations and standards
Product Evaluation:
Purchasing units assess the quality, design, packaging, and other relevant attributes. They might also evaluate:
- Product durability
- Warranty and after-sales service
- Marketing and promotional support provided by the supplier
- Retail margins and suggested retail price
Clarification:
Once a supplier and the product selected for regional retail distribution chains, the certain terms should be finalized such as:
- Actual purchase price
- Minimum order quantities
- Payment terms
- Delivery schedules
- Returns and allowances for damaged or unsold goods
- Marketing and promotional commitments
Pilot or Test Launch:
Once the product is selected, regional retail distribution units may choose to launch the product in a limited number of stores or regions to gauge customer response, sales velocity, and any potential issues.
This phase helps to make informed decisions about a full-scale rollout.
Onboarding:
The regional distribution chains work with the supplier to set up processes for regular orders, deliveries, and restocks.
This also involves integrating IT system for smooth order processing and inventory management.
Full-Scale Launch:
The product is rolled out to all targeted stores, promoted (if agreed upon), and monitored for sales performance.
Continuous Review:
Regional retail distribution chains consistently monitor sales data, stock turnover rates, and customers’ feedback.
If a product does not meet expected sales or profit margins, or if there are consistent issues or complaints, regional distribution chains might discontinue the product.
Feedback Loop:
Regional retail chains can provide feedback to suppliers on product performance, issues faced, or any suggested improvements.
This feedback can be used for product modifications or packaging changes.
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More information about supplier relations can be found here.