4.10

• Choosing the right suppliers is

  an important part of

  developing a successful

  business.

  • This process is referred to as

  procurement.

  • Failing to find the right

  suppliers can cripple the ability

  of the business to provide

  goods and services to their

  customers.
• For a business to remain

  profitable it must keep

  costs low where possible.

  • Business owners will need

  to consider the price of

  the raw materials or goods

  offered by the suppliers
• The quality of the goods and materials provided by suppliers will

  generally determine the quality of the end product offered by the

  business.

  • Therefore, if a business wishes to develop a good reputation it

  needs to source quality inputs from its suppliers.
• Businesses that have a fast

  turnover of stock often rely on

  quick and timely delivery from

  their suppliers.

  • If a business doesn’t receive

  the goods that are needed to

  continue its operations, it may

  not only lose sales but also its

  reputation may suffer as a

  result of not being able to

  deliver to its customers.
• Being in close proximity to

  suppliers can save the

  business time and money.

  • Sourcing supplies locally is

  not only more

  environmentally friendly but

  also helps to support the

  local economy — this is

  considered socially

  responsible.
• It is vital that the business’s suppliers meet the corporate

  social responsibility objectives of the business. This is

  known as sustainable procurement.
• Sustainable procurement decisions consider the

  environmental and social impacts from purchased materials

  as well as the cost, or economic impact.
• Sustainable procurement will involve a high degree of

  collaboration between the business and suppliers.
• It is the duty of a business to take reasonable care when

  selecting a supplier to ensure that its own business is not

  tainted by the poor practices of a supplier.
• If a business relies heavily on a given supplier it should

  enquire about and, if possible, inspect the operations of

  that supplier prior to making any long-term commitments.
• A business should consider the price and quality of its suppliers’

  goods, as well as the reliability and proximity of the supplier.

  • A business must choose a supplier that caters for its needs in a

  socially responsible manner.

  • Choosing suppliers that meet the corporate social responsibility

  objectives of the business has a number of benefits and limitations