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Supplier selection

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Supplier selection

  1. 1. Supplier Selection Training for Selecting the Right Supplier by Scott Mathusek10 April 2010 Supplier Selection 1
  2. 2. What will be covered• Supplier Selection Defined• Brainstorming Exercise• Supplier Evaluation and Selection Process• Real World Example• Practice Exercise10 April 2010 Supplier Selection 2
  3. 3. Supplier Selection Defined• Supplier: “External entity that supplies relatively common, off the shelf, or standard goods or services” (Business Dictionary)• Supplier Selection: “The stage in the buying process when the intending buyer chooses the preferred supplier or suppliers from those qualified as suitable.” (Westburn Dictionary)10 April 2010 Supplier Selection 3
  4. 4. Brainstorming Exercise• Why is supplier selection so important to your organization?• What can result in your company from having the incorrect supplier?• What is important to you when finding a supplier?10 April 2010 Supplier Selection 4
  5. 5. Evaluation and Selection Process1. Recognize the need for supplier selection2. Identify key sourcing requirements3. Determine sourcing strategy4. Identify potential supply sources10 April 2010 Supplier Selection 5
  6. 6. Evaluation and Selection Process5. Limit suppliers6. Determine method of supplier evaluation and selection7. Negotiate and select supplier10 April 2010 Supplier Selection 6
  7. 7. Recognize Need for Supplier Selection • Why are you looking for a supplier? – End of contract – Problems with current supplier – Have new product 10 April 2010 Supplier Selection 7
  8. 8. Identify Key Sourcing Requirements • What do you require from your suppliers? • Are your requirements in alignment with company goals and mission? • Consider Carter’s 10 C’s of Supplier Selection 10 April 2010 Supplier Selection 8
  9. 9. Carter’s 10 C’s of Supplier Selection• Competency • Commitment to quality• Capacity • Cash/finances• Consistency • Clean• Control of Process • Culture and relationships• Cost/Price • Communication 10 April 2010 Supplier Selection 9
  10. 10. Determine Sourcing Strategy• How many suppliers are you going to need? – Single Source – Multiple Source10 April 2010 Supplier Selection 10
  11. 11. Identify Potential Supply Sources• Where can you find your suppliers?• Simple brainstorming activity will generate a long list of possibilities10 April 2010 Supplier Selection 11
  12. 12. Limit Suppliers in Pool• Narrow down your choices 33% 33% 40% 40% 75% 75% 43% 43%100% 100% 36% 36% 22% 22% 25% 25% 57% 57% 31% 31% 18% 18% A10 April 2010 B C Supplier Selection D E12
  13. 13. Determine Method of Supplier Evaluation and Selection• Choose what you would like to evaluate• Decide where you will gather your information from• Make selection from your evaluations10 April 2010 Supplier Selection 13
  14. 14. Negotiate and Select Supplier• Perform negotiations with supplier• Choose supplier and agree to terms10 April 2010 Supplier Selection 14
  15. 15. MFG.com• Moves to India to better position themselves as a buyer• Looks to specifically increase competency, commitment to quality, and capacity and lower cost/price10 April 2010 Supplier Selection 15
  16. 16. Practical Exercise• You and three others have narrowed the search down to four companies• Using Carter’s 10 C’s you have chosen four factors you will use to evaluate and have also assigned each factor a weighted percentage• Perform a weighted factor analysis to decide which company to is the best option10 April 2010 Supplier Selection 16
  17. 17. Column1 Danny Ryan Jane Helen Mode AverageCompetency 40% 30% 25% 30% 30% 31% Capacity 30% 30% 25% 20% 30% 26%Consistency 20% 20% 25% 30% 20% 24% Control of 10% 20% 25% 20% 20% 19% Process A B C D Competency 77 90 76 85 Capacity 85 85 85 90 Consistency 95 86 95 87Control of Process 90 95 90 9010 April 2010 Supplier Selection 17
  18. 18. MODE A B C D Competency 23.1 27 22.8 25.5 Capacity 25.5 25.5 25.5 27 Consistency 19 17.2 19 17.4 Control of Process 18 19 18 18 Total 85.6 88.7 85.3 87.9 AVERAGE A B C D Competency 24.1 28.1 23.8 26.6 Capacity 22.3 22.3 22.3 23.6 Consistency 22.6 20.4 22.6 20.7 Control of Process 16.9 17.8 16.9 16.9 Total 85.8 88.7 85.5 87.710 April 2010 Supplier Selection 18
  19. 19. Summary• The evaluation and selection process is much based off of company goals, missions, and preferences• Use Carter’s 10 C’s to have a more encompassing evaluation10 April 2010 Supplier Selection 19
  20. 20. Readings listAll information used for this presentation is based from information from the following sources:• Fuller, Neil. “How Many C’s in Partner?” All Business. Supply Management, 8 Sept. 2005. Web. 5 April 2010.• Hadaway, Jordon. “Supplier Selection.” 12Manage The Executive Fast Track. 12Manage. 6 January 2010. Web. 7 April 2010.• “Home: Sourcing Platform MFG.com Launches India Operations.” NetIndian, 3 April 2010. Web. 8 April 2010.• “Supplier.” Business Dictionary. Online Business Dictionary, 2010. Web. 5 April 2010.• “Supplier Selection.” Westburn Publishers. The Westburn Dictionary of Marketing, 2002. Web. 5 April 2010.• Oxenbury, Alan. “Making the Right Choice.” Supply Management. Supply Management, 20 July 2006. Web. 6 April 2010.• Oxenbury, Alan. “The Final Countdown.” Supply Management. Supply Management, 3 August 2006. Web. 6 April 2010.• Wallin, Cynthia. “Supplier Selection.” Brigham Young University. Microsoft PowerPoint file. 9 February 2010. 10 April 2010 Supplier Selection 20

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