Are you struggling to find qualified diverse suppliers to meet internal goals? Are you looking to expand your pool of potential diverse suppliers as you build a sustainable, inclusive supply chain? Do you want to normalize the inclusion of diverse suppliers in the procurement process? Enter the well-crafted supplier questionnaire: a tool that can save you time and energy while you gather valuable information and promote supplier diversity.
When you send out a request for proposal (RFP), you are inviting suppliers to provide you with information about their capabilities, assets, processes, and qualifications. The supplier questionnaire is a great way to vet potential suppliers and gather information, and it can easily be automated through the use of a supplier portal. Asking the right questions at the beginning of the process can give you a clear picture of both the potential successes and potential risks of working with a supplier.
Here are some standard sections you'll want to include in your questionnaire that apply to everyone: security of supply, disaster recovery plans, financial strength and stability, joint ventures and alliances that could affect your business, potential conflicts of interest, current customers and how your company would fall on their priority list, and the supplier's account management practices.
While these sections are applicable across industries and types of products or services sought, you'll want to tailor the questions to generate the answers you most need to move on to the next step in the contract process.
In addition to the general questions on your questionnaire, you will need to tailor each for the type of supplier you're seeking. Different industries have different regulations and requirements regarding things like safety, hygiene, waste disposal, and even ethics.
For example, the food industry has specific requirements for food production, processing, and packaging that must be met to ensure the safety of the consumer. The pharmaceutical industry places limits on dosages that can be manufactured and has strict labeling rules.
Each industry has its own standards, which your procurement team should be familiar with—or know how to access—so you can efficiently gather relevant information with your supplier questionnaire.
Depending on the supplier you're seeking, you will want to request:
- Industry-specific certifications and licenses
- Safety and inspection documentation
- A personal hygiene policy
- A description of its product/environmental testing program, including information on the laboratory that it uses for testing samples
Request Diverse Supplier Information
As we continue to work toward inclusive supply chains, our supplier questionnaires need to reflect that intent. It's time to include a section, standard to all RFPs, gathering diversity information from suppliers. Ask for any third-party diverse supplier certifications such as MBE or WBE with the appropriate documentation. This quickly and confidently confirms if a company is 51 percent minority-owned and allows you to track your diverse spend in the right category should you partner with that supplier.
You can take your efforts a step further by requesting the company's own supplier diversity strategy, which serves the dual purpose of normalizing inclusive supply chains and alerting you to Tier 2 supplier diversity opportunities, one of the fastest ways to increase the number of diverse suppliers in your supply chain. Pacific Gas & Electric is a good example of a company that provides clear information about its requirements for supplier diversity for its Tier 1 suppliers.
Welcome Small and Minority-Owned Businesses
It's important to be as clear and unbiased as possible when crafting your supplier questionnaire to encourage a range of potential suppliers to bid. For example, a question might be phrased in a way that favors suppliers that already work with other comparably sized companies. This might discourage a small, minority-owned supplier from bidding because your company would be its first client of your size.
And finally, here's an outside-the-box idea for encouraging more diverse suppliers to bid on your RFPs: Send out more RFPs for them to bid on. How? Break up larger contracts that few companies have the capacity to fulfill into smaller contracts that can be spread across several minority-owned suppliers.
One of the main roadblocks companies face when trying to increase the number of diverse suppliers in the supply chain is the issue of capacity and scalability. Make that a consideration from the start of the procurement process, and the roadblock goes away.
Breaking up contracts has the added benefit of reducing dependency on one large supplier, limiting your exposure to events that might otherwise disrupt your entire supply chain.
A well-crafted supplier questionnaire should be a primary tool in your supplier diversity toolbox. Use it to vet suppliers, gather supplier information, and work toward a more inclusive supply chain.