We've recently published a new research paper, sponsored by Achilles, looking at the pre-qualification process, a key part of the wider sourcing/procurement cycle. It's called: Is your Supplier Selection Process a Source of Competitive Disadvantage?
Here's how it starts...
"Pre-qualification -- not the most exciting topic in the world is it? And yet...
Consider firms who end up as our suppliers, but really should never have got to that point. Firms who generate reputational or operational risk for us; firms who go bust or get into financial trouble; firms who aren't actually capable of doing what they claimed they could. Firms who maybe aren't even allowed (in a legal or regulatory sense) to do the work we've employed them to do.
Firms who really we should have weeded out from the selection process long before we even got close to awarding them the contract.
Then, there are those potential suppliers who never made it. Firms we rejected because their turnover wasn't large enough to get through our pre-qualification hurdle. Firms who weren't very good at answering our trick questions about quality certifications... Might one of those have been the supplier who actually would have come up with a stunning, innovative idea that would have given us real competitive advantage? We'll never know.
Then we have the sheer cost of the process, often not identified clearly, in terms of the time, effort and resource that goes into the process..."
Anyway, you get the point. As well as the cost of pre-qualification activities, and the time required, it can be either a positive part of the procurement process or a worryingly real source of competitive disadvantage.
So, in this paper we look at the four purposes of the pre-qualification process: supplier identification, registration, verification and selection. We discuss those four factors in some detail -- selection is interesting, for example, as it's the area that often confuses suppliers who assume because they're "qualified" they should automatically be able to tender. Not always so... But how do we make sure we do that selection properly?
We also look at how to actually execute a successful pre-qualification process, and take a look at the use of third parties to assist in the pre-qualification process. Finally, we look at some of the other key issues -- how do suppliers perceive all of this, for instance? As we said earlier, discouraging good suppliers through clumsy or inappropriate processes is clearly not a very smart idea.
You can download the paper here now -- free on registration for procurement practitioners, Spend Matters PRO membership required for providers.