It is common to see newspaper advertisements calling for registration of suppliers.
This requirement to register suppliers is equivalent to know-your-customer concept in banking and finance industry and marketing function.
Many regard this process as supplier certification process when it falls far short to it due to its inadequacies.
The registration process is mainly limited to collection of information about particular suppliers that offer various categories of organisational needs.
Supplier registration is just, but the beginning of a technical and strategic process of supplier certification.
Supplier certification is the most recent innovation in the buyer-supplier interface. Certification process involves assessment of previous experience and qualification of suppliers to establish capability to meet needs with little or minimal need for physical inspections of deliveries.
In this regard, it is evident that not all suppliers on the approved list are certified and secondly, not all product lines or categories would require certified suppliers.
There is a stage that is between approved or mere supplier listing and supplier certification.
Certification is achieved after intensive investigation of the level of a supplier’s quality from a record of previous deliveries.
From approved list, a supplier graduates to be a preferred supplier, one who from the approved lot, has performed well and is considered first for the next procurement.
Many supplier registration processes do not proceed to supplier management programmes that includes vendor rating, assessing the performance of each supplier with respect to issues of quality in the sense of product attributes and meeting quantity schedule requirements, costs and time.
At the end of each trading season, no meaningful information with respect to supplier performance is gathered at the detriment of business competitiveness.
From a vendor rating exercise that is done at varying intervals depending on the nature of requirements, buyers are able to assess performers from non-performers.
The preferred suppliers are selected on the basis of assessed performance. The difference between a preferred supplier and a certified supplier is that inspection of all incoming supplies is mandatory, whereas receipts from certified suppliers would not undergo such rigorous process.
A performing preferred supplier is considered for certification. The consideration is not limited to volume and cost, it includes assessment of culture, commitment and risk management techniques of the supplier to promote long term relationships.
This involves assessment of the supplier’s quality systems, continuous improvement programmes and his target for zero defects.
A supplier considered for certification is regarded a good business associate. This is against the principle of building robust supply chains since competition is now between supply chains as opposed to individual organisations.
The deliveries for such suppliers will be on record to meet schedules and in good physical condition without extreme price fluctuations.
This is because there is no need for considering a supplier for certification when they are about to be eliminated for poor performance.
It must be noted that these processes do not come cheap, but are sound investments for serious organisations. Dealing with many supplier merely registered comes with its costs.
Many will agree with me that purchases of non-technical items such as printer cartridges and inks was going to be very easy if organisations had adopted a systems of continuous review of registered suppliers to segment preferred suppliers who provide good quality on time at the right price and upgrade them to certification if they qualify.