In a business world of globalization, supply managers are faced with the challenging task of uncovering financial and other data on potential and existing international suppliers. However, with resources such as the Internet, the ability to locate financial reports and product studies is becoming increasingly less difficult. This information is valuable to a supply management organization in the midst of choosing between a supplier in the United States, North America, or overseas.

Not only do supply managers need to gather the information to predict the staying power of potential suppliers financially and technologically, but they must gather that data on suppliers far from their domestic home base of operations. Supply management professionals are also subject to varying reporting requirements and traditions. Although the world is moving toward the Generally Accepted Accounting Principles (GAAP) used in the United States, some differences exist in how acquired organizations are treated and what items must be disclosed. According to the Financial Accounting Standards Board (FASB) Web site, the International Accounting Standards Committee (IASC) is working toward a global accounting standard. At www.fasb.org, comparisons of international accounting standards can be reviewed.

The following are tools that supply management professionals can use to gather data on potential international suppliers, such as financial stability, technological position, political stability, management talent/history, and environmental record.

One tremendous source of information is professional data collectors. These organizations have editorial teams and research staff that pull together financial and business profiles of select organizations. Virtually any public, large private, or U.K.-based organization is profiled by one or more of these data warehouses (even private organizations in the United Kingdom are required to submit audited financial statements to the Department of Trade and Industry).

With the acceptance of the Internet as a common business tool, there is a tremendous portal to this data. Evaluate the chosen Web site carefully, as some charge fees for their information, some are funded through advertising, and the quality of their data varies. The table below lists many of these organizations, their product offerings, and how to get in touch with them.

Using mainstream search engines such as Yahoo!, Alta Vista, and Northern Light can provide supply management professionals with a myriad of information. These search engines often include a variety of "hits" about the supplier's organization, such as financial reports, worldwide locations, and product overviews. The following are a few of the popular Web sites that supply management professionals will find helpful in locating information on international suppliers:

• Google (www.google.com) is a simple and powerful search engine.
• Alta Vista (www.altavista.com) recently completed refurbishing its search engine.
• Northern Light (www.northernlight.com) is a powerful search engine that offers a comprehensive list of "hits" for its users. Many of Northern Light's "hits" are articles that the search engine charges its users to access. However, the small charge of a few dollars is worth the access to a new study by a supplier on its new manufacturing process.
• Yahoo! (www.yahoo.com) is a valuable search engine for locating financial data, strategic alliances, and international locations of suppliers.

The U.S. government provides resources to support global trade initiatives. While its focus is primarily on aiding export, these tools can be used to assist import efforts as well. The government recognizes that one effective method to aid sales in a specific country is to establish a presence there, using the country's goods and services. The following Web sites will provide a good starting point for using government services, relationships, and tools.

• At www.chamberofcommerce.com, supply managers will find a search engine to help locate the nearest government agency that is prepared to assist in the evaluation of potential suppliers. They can search for U.S. embassies, foreign chambers of commerce, economic development offices, state chambers of commerce, and foreign embassies in the United States.
• At http://infoserv2.ita.doc.gov/FTOHomeP.nsf, supply management professionals will find a search engine for foreign trade offices around the world. This database lists foreign chambers of commerce, foreign trade and economic offices, foreign trade representative offices, and foreign embassies located in the United States, as well as foreign customs offices located overseas.
• At www.state.gov/www/about_state/business/index.html, the U.S. State Department offers a tremendous resource to the global trader. The State Department views its responsibility as helping U.S. organizations to take advantage of the opportunities offered by a global free market. Some of the specific ways it helps organizations include problem-solving assistance, lobbying the government for open trade policies, and providing industry-specific information (www.tda.gov). Personalized assistance can be initiated by calling 800/USA-TRAD(E).
• Contact the Securities and Exchange Commission (SEC) at www.sec.gov to reach its services including free access to many of its filings, current trade news, and rulings on various disclosure topics. Each country has its own version of the SEC that gathers and evaluates organizations' financial data.

A valuable and surprisingly easy method to collect information on potential suppliers is to ask them for it. Ask for anything because supply management professionals are not limited by the data collected by a third party. Certainly suppliers can refuse to provide the information, but in many cases they will honor polite and professional requests. In addition to strict financial information, supply managers can ask about capabilities, resources, performance history with other customers, locations, technological position, management history, environmental record, and specific product/service requirements.

Written requests for information are best for the initial qualification of suppliers, while site visits are effective to prepare for negotiations and selection. During site visits, supply managers can follow up on answers with probing questions to develop a deep understanding of the intentions, motivations, and capabilities of the supplier. If a site visit is not possible, consider combining a written request for information with a direct conference call or informal networking.

When Floyd Stone, director of the global supply chain for Alsip, Illinois-based Griffith Laboratories, evaluates a new supplier, he taps one of his favorite resources - his freight forwarder. Freight forwarders frequently handle customs clearance and shipping needs for international customers. Because of their position in the market, they develop relationships with many local businesses in each country they serve. While the forwarder can be a tremendous source of information, supply management professionals need to develop the relationship and trust first. Recently, Stone wanted to identify global sources for garlic, and he identified a number of sources by asking his forwarders the following questions:

• Can you name the organizations in your region that grow and distribute garlic products?
• Which organizations are highly regarded in the industry?
• Are there any public issues with prison or child labor with any of these organizations?
• What seasonality concerns should I address when sourcing from this region?
• Are there any import/export quotas or restrictions I should be aware of?
• What are the best ports to ship through?

Similar to freight forwarders, supply management professionals can develop business relations with attendees at international conferences and meetings. Jim Regan, senior vice president of Washington D.C.-based International Business-Government Counselors (IBGC), says that his members are able to network with business and government leaders from several countries at their meetings and through their informal network. Supply managers can find more information about IBCG at www.ibgc.com. A current list of more than 300,000 organizations engaged in international trade is available at www.fita.org/index.shtml.

When evaluating any potential supplier, supply management professionals have many sources of information at their disposal. Use a mix of the sources available to gain a well-rounded and more objective view of the supplier to minimize the cost of the data collection. Due diligence work should be done upfront, allowing supply managers to avoid the hassle of dealing with a bankrupt supplier, outdated technology, supply interruptions, public relations surprise nightmares, or lackluster performance.

"Box page 10"

The organizations listed in this table provide historic, financial, and biographical information on the organizations in their databases. In addition to the information they possess, they also provide springboards into searching for relevant news items and additional Web sites.