How to choose your suppliers?

• Supply chain

  The sequence of processes required for the production and distribution of a good or service to the end customer
• Example of a supply chain

  • To make chocolate: Farm with cocoa plant in Mexico -> Factory in Mexico -> Wrapping in the USA -> Wholesaler in the UK -> Retail outlet in the UK
• Globalisation

  Leads to supply chains becoming more efficient
• Efficient supply chains


  Result in quicker movement from start to end, leading to lower prices for customers and potentially more sales
• Factors to consider when choosing suppliers

  • Price
  • Quality
  • Speed of delivery
  • Predictability
• Price as a factor in choosing suppliers

  • Low price means less total costs and higher profits, but may have a trade-off with quality
• Quality as a factor in choosing suppliers


  • Higher quality may lead to higher sales, but also higher costs
• Speed of delivery as a factor in choosing suppliers

  • Increased delivery speed improves efficiency and reduces total cost of production, but may come at a higher cost
• Predictability as a factor in choosing suppliers

  • Reliable and predictable suppliers are crucial to avoid disruptions in production and maintain reputation