Are you looking to land one of the big customers? Becoming an approved supplier for a large global company can change your business forever. But landing a big customer takes far more than a hello and a handshake. We recently reviewed the supplier discovery process of a leading Fortune 500 company, and here’s what we learned:
Step 1: The Company Defines A Need For A Product Or Service
Whether the need falls under the direct spend or indirect spend category, initial minimum supplier requirements are defined before supplier discovery begins.
Direct spend refers to goods and services directly incorporated into manufacturing a product, such as raw materials, components, hardware, and subcontract manufacturing services. In contrast, indirect spend refers to goods and services not directly incorporated into manufacturing a product, such as computers, equipment, furniture, office supplies, and janitorial services.
Step 2: Supplier Discovery Leads To A Shortlist
The company’s procurement team begins researching possible vendors on supplier discovery platforms such as Thomasnet.com.
Big companies will research online and look into who you are, what you do, your unique selling proposition, and how it all benefits your clients. The top performing manufacturing and industrial company profiles listed on the Thomas Network include the following elements to increase their chances of receiving an RFQ:
- Capabilities: A short, one-page assessment of what your business can handle may end up being one of the most important overviews you include. This can include key manufacturing equipment and even the capacity of the machines you have on your shop floor.
Detailed Product Specs: OEMs want detailed product specs if you are a supplier of stock or configurable products; Specs also include detailed capabilities info, machine lists, and sample project pages if you are a custom manufacturer.
- Quality Certifications: Manufacturing quality certification and achievement info is critical — most OEMs tend to mandate a minimum certification level and QC process for their suppliers.
Ownership/Diversity Status: This includes all essential classifications of diversity for your business. Some OEMs have diversity requirements for each project or product line, like women-owned or minority-owned.
- Contact Information: This includes phone number, physical address, and email address so that customers and prospects can reach out through their preferred form of communication.
- Product Images: Prospects want to see exactly what they're ordering.
- CAD Models: CAD models create sales leads at a 2.5x greater rate than text-based product information. Companies can get their CAD files in front of 27 million design engineers today, click here to learn about the Thomas TraceParts Network.
- Industries Served: Which industries are best served by your core competencies? How have you successfully diversified into other sectors?
- Geographic Footprint: Are you regional? National? What geographies do you support? Do you deliver from one or multiple locations?
White Papers: White papers are long informative reports that can benefit your prospects in breaking down complex processes you offer.
Build Your Company Profile On Thomasnet.com
Based on the relevant company information they find here in step 2, buyers create a shortlist of possible partners, and then contact those companies with a Request for Information (RFI).
When it comes to adding suppliers to an OEMs shortlist, big companies care about many different things that go beyond what your online presence may list. Who you're currently working with and even your company's annual sales numbers can be a deal breaker when reviewing new suppliers.
Download our eBook, "How To Make The Industrial Buyer's Shortlist" to learn more.
Step 3: Suppliers Provide More Information
Companies who were fortunate enough to receive an RFQ will need to provide the next level of information to the potential buyer.
OEMs want to know that you have a high on-time delivery rate, zero returns, and no unplanned internal downtime. You’ll need to document and discuss the service you’ve provided to your current customer base. An outline of expectations and key performance indicators (KPIs) will allow you to agree on what a successful partnership with you looks like.
You already provided the buyer with product images, so at this point their engineering team wilI need product samples. With design team's help, the OEM engineers will test and sample your product for their project.
OEMs want to know how you operate your business and fulfill other buyers. They may be especially interested in where your raw materials are purchased and what outsourcing you employ. Many big companies tend to be interested in corporate social responsibility efforts so make sure your green manufacturing and sustainability initiatives are clearly communicated online.
Based on the information received in steps 2 and 3, the procurement team determines whether or not each supplier meets the minimum requirements defined in step 1. If so, the supplier advances to the next step.
Step 4: Advanced Supplier Review
Possible partners are more thoroughly vetted at this point.
The next step buyers may take is to set up a site visit. The buyer may want to see your operation in person to see a tour of your manufacturing facility, review your quality procedures, and discuss your most critical employees. Your internal manufacturing capabilities will be reviewed to ensure that your machinery and staff can produce the required quality and volume of parts.
However, perhaps time (or the current global health concerns regarding COVID-19) aren't on your side and the buyer needs your product ASAP. Providing buyers with the option to view a virtual tour of your facility can be a great idea and provide you bonus points when it comes to them deciding on a supplier.
You're in luck because Thomas offers video content production for free for OEMs, Distributors, and Service Companies. This can make a great addition to your Thomasnet.com profile and industrial website. Get started with your free facility video here.
As the buyer’s design and engineering team begin testing their prototypes, you may need to travel to their facility to aid in product testing, and provide feedback on a buyers original design. (If there are still travel restrictions regarding global health concerns, this is where using video technology will help too.) Your ability to offer design alterations to increase manufacturability and profitability will be a tremendous advantage.
The buyer may want to see your expertise first hand and request a sample of a custom part. You’ll need to provide samples to be included with the prototype assembly, and will be expected to assist with installation and appropriate testing to ensure proper use by the buyer. You may need to decide whether to “eat” tooling costs to win a more significant business opportunity.
You’ll want to review the buyer’s needs and provide any analysis that can reduce the overall cost. This may be in product selection, design, volume, or shipping options. Only if a supplier meets all the requirements — and meets them better than the other candidates — does that supplier get selected for the next step.
Another Angle: What's The Problem With Volume Commitments?
Step 5: Acceptance As A Viable Partner
The “winning” supplier goes through the company’s new supplier setup process, which (of course) involves contracts, paperwork, but most importantly, a new opportunity.
The supplier is added to the Fortune 500 company’s approved vendor list, which exposes the supplier to the company’s vast global network of purchasing professionals.
Bonus: Help Your Buyers Source Faster
When sourcing publicly, it should be no surprise that it can be a slow process that can take months or even years. As a supplier, it's essential that you find ways to speed up the process for your buyers, while still remaining compliant. This can help you establish a great relationship with procurement folks and improve the likelihood of them becoming repeat customers.
3 Ways To Accelerate Contract Signing
- Centralized Contracting: If your customer is working on a large project, ask if there are other ways you can help them? It's easier to work with one supplier than multiple if possible.
- Internal Workgroups: Create groups of employees across your organization to help your customers accelerate the buying process. Discuss the common needs, solutions, and implementation plans.
- Easy To Use Product Catalog: If you're a custom manufacturer, make it easy for procurement people to search what they're looking for on your website and Thomasnet.com profile. Offer downloadable CAD files so engineers can also spec projects.
Fact: CAD files can contribute to 2.5 x more sales qualified leads than text-based content. Click here if you do not have an updated product catalog.
As you can see in Step 2, it’s vitally important for your company to have a presence on supplier discovery platforms such as Thomasnet.com — a leading resource that enables you to promote the wealth of detailed information buyers require when putting together their shortlists.
If you want help implementing a strategy that drives real business results and gets in front of big companies, our industrial experts are here to make it happen for you — we've been connecting buyers to the right suppliers for more than 120 years. Here are some additional resources for buyers and suppliers:
- How To Improve Your Supplier-Distributor Relationship
- 12 Sourcing Tips To Identify New Quality Suppliers
- Increase Your RFQs With Thomasnet.com Registered And Verified Programs
- 5 Ways To Keep A Supplier Engaged And Build Supply Chain Partnerships
Editor's Note: If you're sourcing suppliers for COVID-19 items, click here for those manufacturers and distributors. If your industrial business can support the production of essential supplies to combat the COVID-19 outbreak, please complete this form to notify us of your availability and willingness to dedicate resources. Thomas is working with State and Federal Government offices to help mobilize manufacturers to deliver supplies and services.
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