The second step in the vendor selection process is to execute a vendor search in order to compile a comprehensive list of vendors that may be able to meet the requirements as defined in the business analysis phase. After that is completed, you will need to narrow the list of vendors down to only those which you want to request more information from. Next, compose a Request for Information (RFI) and sent it to each potential vendor. Finally, create a "short list" of vendors that will receive your Request for Proposal (RFP) or Request for Quotation (RFQ).
1. Compile a List of Possible Vendors
Use a spreadsheet or database program to start entering the contact information for your list of possible vendors. Depending on the service or product that you are completing the vendor selection process for, you will want to define the scope of your vendor search in terms of local, regional, national or international. Some searches will be limited to the local area; for example, searching for a janitorial service would not be practical on the international level. On the other hand, a simple mass produced part (in sufficient quantities) would yield itself very well to an international search.
Entering the search term "vendor search" in Google and it will yield several websites that provide vendor product and contact information specifically tailored to different industries. These industries range from information technologies to airport executives to advertising directors and everything in between. If you are selecting a vendor for a common part, service or commodity, trying entering the name of the part or service you are searching for a vendor. Be creative in choosing the words you search for and remember to limit the number of words in your search criteria (i.e. less words yields more results).
In your day-to-day business contacts look for an opportunity to mention that you are looking for a vendor to supply a certain part or service. The business acquaintances you are conversing with may have had experience in the same area and can recommend a vendor or supply a list of vendors that they contacted.
Registers and Directories
Use trusted registers and directories. The Thomas Register which used to be a multi-volume encyclopedia-like tome, is now available online at ThomasNet. An international version is also available at Thomas Global.
2. Select Vendors to Request More Information From
Depending upon the effort that you put into searching for vendors, the list you created may be too long. Assess the number of vendors that you found, taking into account that you will have to send each one a Request for Information (RFI) and evaluate it upon its return. A targeted "rifle" approach will serve you better than a widespread "shotgun" approach. Depending upon the size and scope of the project, anywhere from three to twelve vendors would be an appropriate number to send an RFI to.
3. Write a Request for Information (RFI)
Write a document that will be delivered to each vendor that you have decided to investigate. Remember, for smaller parts and basic services this should be short and simple. For more complex parts and complicated services, a more detail and longer request should be developed. This document should include the following sections:
- Cover letter introducing yourself and your company
- A contact person(s) for the vendor to contact with questions and clarifications
- Short description of the part or service
- Request for product/service and company brochures
- Vendor screening criteria questions (see below)
- Deadline for the vendor to respond
For each of the vendor requirements defined in the Analyze Business Requirements section, write a question for the vendor to respond to. Here are some examples that match the examples requirements previously given:
- Do you have a local delivery service for same-day orders?
- What is your market capitalization?
- Are your employees bonded and insured?
- Please provide at least five references that we can talk to directly.
- Do you have electronic ordering processing?
- What percent of your raw material originates from within the United States?
- What time is your Technical Service Department available (US Eastern Time Zone)?
4. Evaluate Responses and Create a "Short List" of Vendors
When the Request for Information (RFI) packages are retuned, review the responses. If there are any ambiguities, contact the vendor for clarification. Gather the Vendor Evaluation Team and decide which vendors will be on the short list. If there are any criteria that you would consider pass/fail (e.g. "need 24 hour support") and the vendor did not meet this requirement, eliminate that vendor and move on to the next one. The "short list" should be between two and seven vendors (depending upon the size and scope of the project).