key takeaways
If you only read 30 seconds of this article:
- Reliability means on time, in full, at the agreed quality. Measure all three, not just price.
- Build resilience with more than one qualified source for critical spares, across different regions.
- Set your criteria before you shortlist, and test suppliers with proposals and RFQs, not just their pitch.
- Score suppliers continuously with KPIs such as lead time and "on time, in full" (OTIF), and feed the results back into your stocking policy.
Supplier reliability dos and don'ts
| Do | Don't |
|---|---|
| Qualify secondary and tertiary suppliers for critical spares | Depend on one distant supplier for line-stopping parts |
| Write your selection criteria before you shortlist | Choose on price or a good pitch alone |
| Request proposals and RFQs to test real service | Assume a supplier that looks good on paper performs well |
| Track lead time and OTIF for every supplier, every site | Review performance only when something goes wrong |
| Feed lead-time changes into your stocking levels | Leave safety stock unchanged when a supplier slips |
| Build long-term relationships with reliable suppliers | Let rogue spending bypass the suppliers you trust |
Finding suppliers you can trust
Expand your network
In the globalized marketplace, it's common for businesses to source indirect materials and MRO inventory from offshore suppliers to secure substantial savings. However, the more distance there is between you and your supplier, the higher the risk of supply chain disruptions similar to those experienced during the Covid-19 pandemic.
To build an agile supply chain, it's often worth using multi-location suppliers spread across different regions, whether regional, national or global. You can expand your network through industry networking, referrals, or industry associations. Then, even if your go-to supplier can't deliver because of an unexpected disruption, you can turn to your secondary and tertiary vendors and keep production running.
Set your criteria first
Create a list of criteria before you shortlist. A few things to consider:
- How established they are in your product type, target market, and any other specific needs of your business
- Lead times and availability of necessary materials
- How much importance the vendor places on quality assurance
- Payment terms and conditions
- Return policies and satisfaction guarantees
Using this list, you can compare candidates. Some suppliers look good on paper but deliver sub-par service, which is why it's important to request proposals and RFQs so you can judge their quality yourself.
Supplier insight also helps in negotiation. Knowing a supplier's strengths and weaknesses lets you safeguard your MRO processes, build contingency plans for the weak spots, and negotiate terms that come with an accountability plan and healthy margins. For how to group suppliers by risk and value, see MRO supplier segmentation.
Keeping suppliers accountable
Measure and report KPIs
Choosing the right vendor is one thing; keeping them accountable is another. You often can't expect a vendor relationship to be problem-free. Review service levels continuously and set clear benchmarks and Key Performance Indicators (KPIs) to track performance. (UNA)
The right materials management software does the heavy lifting by consolidating supplier information from every location into a single view, so you can see whether suppliers are complying with the terms of your contract. For instance, you can score suppliers on lead times and "on time, in full" (OTIF) rates. If a supplier often delays shipments, it may be time to replace them with someone more reliable.
You can also share and compare data across manufacturing sites to see how location affects procurement and fine-tune your processes accordingly. See category and supplier spend analysis.
Connect reliability to stocking
Supplier reliability and inventory are two sides of the same risk. When a supplier's lead time drifts, the safety stock on the parts they supply should change too, especially for critical spares. See inventory risk management for MRO and spare parts criticality.
Maintain and leverage strong relationships
A healthy supplier relationship adds value in many ways: shorter lead times, better quality, better pricing and fewer surprises. That's why it's important to foster strong relationships as you build a resilient supply chain.
Digitizing your supply chain also lets you track where your money moves from start to finish, so you can cut back where spending doesn't add value and eliminate poor practices such as rogue spending. See reducing emergency MRO purchases.
Where to start
Just getting started? Pick your most critical spares and check who supplies them, how many qualified sources you have, and how reliable each one has been. Talk to an MRO expert about doing this from the data you already have.
Already tracking supplier KPIs? Connect them to your stocking decisions and see supplier performance across every site and ERP at once. Explore the MRO software platform.
The success of an MRO operation doesn't depend only on what you buy, but also on where it comes from. Choose vendors who bring the best value, help you grow, and above all are reliable. The right MRO software helps you choose and manage vendors with data instead of guesswork. Book a demo.
FAQ
Supplier reliability is a supplier's ability to deliver the right parts, in the right quantity and quality, on the agreed date, consistently. In MRO it directly affects uptime, because a late critical spare can stop production.
Track KPIs such as lead time and "on time, in full" (OTIF) for every supplier across every site, alongside quality issues and contract compliance. Review them continuously, not only when something goes wrong.
Set clear selection criteria, test suppliers with proposals and RFQs, qualify secondary sources for critical spares, measure performance with KPIs, and build long-term relationships with the suppliers who perform.
Unreliable suppliers force teams to hold bigger buffers and make emergency purchases. When lead times drift, safety stock on the affected parts should be adjusted, especially for critical spares.
Yes. Materials management software consolidates supplier information from multiple locations into one view, so you can see compliance and performance and make data-driven sourcing decisions.
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