Key factors when choosing suppliers

Article by Achilles

Article written by Javier Caravantes, an Achilles Ambassador and Chief Procurement Officer in the insurance sector, recognised in 2020 as one of the most promising young leaders of his generation in the INESE and AJPS 40under40 ranking

In times of crisis, like the one we are now facing, being able to gain entry to a company’s pool of suppliers is more important than ever, given both the logical need to increase business volume, which has seen sharp falls in most companies and sectors, and, from the buyer’s point of view, given that the increased workload caused by complications in production, distribution and supply chains, among others, leads to less time being spent on market research, opting to increase outsourcing to trusted suppliers.

Never has it been more essential to belong to that pool of regular suppliers, bearing in mind that the greater a company’s business appetite, the greater the number of competitors there are, meaning we really have to stand out from the crowd to break into a big company’s inner circle of regular suppliers.

There are five key factors that a buyer generally has in mind when choosing one supplier over another, both during the tender process, and at the point of final selection:

  1. Cost. Not so much in terms of the price paid, but rather in terms of value for money. In this sense, companies are increasingly shifting from concepts such as ROI or TCO, almost exclusively limited to monetary matters, to TVO (Total Value of Ownership), where totally or partially intangible aspects come into play, such as the risk associated with contracting or a supplier’s capabilities in terms of sustainability.
  2. Quality. Buyers attach particular importance to the quality of a product or service; in other words, they want a product that meets the company’s needs (but doesn’t exceed them if this comes at an extra cost) and also meets the expectations of an increasingly demanding market.
  3. References. A supplier’s references are examined in detail, both from direct sources (asking the supplier for contacts from other companies and cross-checking them with the service given) and indirect sources (finding recommendations from manufacturers and press references to similar services).
  4. Customer service. As with the above, customer service is essential when cross-checking references; In other words, how easy will it be for me to turn to the supplier when the need arises. And, following on from this, the ability to purchase not only the basic good or service, but also any maintenance or subsequent support offered.
  5. Reputation and ethical standards. Last but not least are the supplier’s capabilities in terms of Ethics, Sustainability and Corporate Governance (ESG). It’s no longer enough for a supplier to simply provide a good or service, these days it is essential that they also apply the same, or higher ethical standards as those of the client company, which is why buyers are now consulting supplier pre-qualification systems to find out about a company’s reputation before including them in any tender or subsequent contract.

Achilles has been helping companies around the globe reduce risk in their supply chain for 30 years. Their communities help companies to make informed decisions based on real-time, accurate data and are key for suppliers when jumping the first hurdle of entering a tender process.

To support those suppliers looking to stand out from their competitors and gain entry to the reference pool of large corporations, Achilles have written a guide that offers a clearer understanding of how to differentiate yourself and stand out from the competition.

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Handling supply chain disruption in a global crisis



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