What Are Preferred Suppliers Lists

on Monday, 06 November 2017.

Companies of all sizes make use of preferred suppliers lists to minimise fraud and unnecessary disruption from suppliers that are ill-equipped to cope with the demands required.
In bigger companies preferred suppliers lists can be shared between departments to increase efficiency. Additionally some companies may require suppliers to sign various documentation such as non-disclosure agreements, if the central database is stored with authorise companies it can cut down on acquisition times and streamline the process of obtaining goods and services.

Some companies hold informal supplier lists which they have worked with for a long period of time and therefore become trusted, bigger companies or organisations that are more confidential in nature will review the supplier list regularly and ratings may be assigned to each supplier.
If a preferred supplier list has been created properly there will be very specific hopes to jump through before being listed, some requirements may be non-disclosure agreements, compliance certificates and in some cases specialist training, security clearances amongst other things.

The downside of these lists is they can restrict flexibility in a business, employees can't always buy from the place they know will do the job best. Sometimes a better solution is to have a supplier criteria document that doesn't restrict purchases that means that certain checks have to be done before purchasing goods or services.

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