Culture-Based Lesson Exemplar

Jeanelei L. Carolino
Ozamiz City National High School
CULTURE-BASED LESSON INTEGRATION
TLE “Entrepreneuship” as a Core Subject
ARTS SUBJECTS
Teaching Tools
 Local Riddles and set of instruction on playing local
game “koruk”
 Set of instruction of the Intangible Heritage Bayle
Benepisyo or Benefit Dance
 Video Clips of Subanen Buklog D
 Video Clip on “Colonial Mentality”
Knowledge
 Identify set of criteria
 Recognize the benefits of using set of criteria
 Choose appropriate sources in purchasing
production materials
Competencies
 Perform local mapping
 Identify local sources necessary in the purchase
of production materials.
 Identify criteria in purchasing production
materials.
 Learn the benefits and factors in purchasing
goods by using set of criteria.
Learning Process
 Perform a short local cultural mapping of local
production materials resources.
 Use local mapping output locating sources for
production materials.
 Grouping and brainstorming for the group
presentation
 Showcasing different learning skills through
visual art form exhibit, dance and role play
Skills
 Pinpoint available resources in the local
community
 State the Benefits in the purchasing activity
 Determine the factors in the purchasing activity
 Enumerate the responsible ways in the
purchasing activities of an enterprise
Assessment
 Finding out available resources in the local
community
 Differentiate between Benefits and Factors in the
purchasing activity
 Enumerate the responsible ways in the
purchasing activities of an enterprise
Enabling Activities
 Showcase students different skills through the
different groups:
- Group 1: visual arts forms art exhibit
- Group 2: dance presentation
- Group 3: acting on role play
Abilities
 Enhance individual different art skills
 Identify location for available resources of
needed goods and services
 Recognize the importance of set-criteria
 As forms of literary appreciation through riddles
 As tools for critical and creative thinking skills of the individuals’ responsibility in the
purchasing activity of an enterprise as well as following set criteria
 As heritage identity of the local available resources, icons and heritages
 As contents and processes in integrating knowledge and skills within and across the course
discipline
INTEGRATION
CONCEPT
 Utilize and locate local
resources through local mapping
 Follow set of criteria
 Literary Arts – Local riddles, local
game “koruk”
 Dance Arts – Bayle Benepisyo or
Benefit Dance and Subanen Buklog
Dance
 Drama – Role Play on the Colonial
Mentality
 Visual Arts – Draw expression of
Filipino “Colonial Mentality”
 Math. – Factoring “finding what to
multiply together to get an
expression”
 Science – Follow procedure in
scientific method in investigating a
phenomena
 English – Verb tense
 Filipino – Panitikan: Bugtong
 MAPEH – Dance movement:
abstract and concrete
 AP – Economic growth “an increase
in the capacity of an economy to
produce goods and services”
 EsP – the conceptual theory of
colonial mentality

CONTEXTUALIZING ENTREPRENEURSHIP LESSON INTO
MULTI-DISCIPLINARY SUBJECTS IN CULTURE-BASED TEACHING
Cultural
Treasures/Assets
Content
Standards:
Knowledge,
Competencies, Skills,
Values and Attitudes
Across the
Curriculum per Level
Performance
Standards:
Integration, Processes,
Lesson Webbing and/or
Alignment
Principles Outcomes
1. Cultural Heritage
 intangible
- riddle
- bayle benepisyo
- local game
“koruk”
- subanen dances
- subanen rituals
2. Cultural Icons
 Person
- subanen
3. Cultural Resources
 subanen tribe
4. Cultural Expressions
 colonial mentality
Unit of Competency:
Perform Purchasing
and Inventory of
Production Materials
 Perform local
mapping
 Identify local sources
necessary in the
purchase of
 Identify criteria in
purchasing
 Learn the benefits
and factors in
purchasing goods by
using set of criteria
 Performs local cultural
mapping of production
materials available
within the local
community
 Presentation of local
cultural heritages:
Riddles and Bayle
Benepisyo or Benefit
Dance through:
- Games on
answering riddles
- Game playing
local game
“koruk”
- Written write-up
on Benefit Dance
 Grouping students
according to
skills/interest for
enabling activities to
wit:
- Group 1: visual arts
forms art exhibit
- Group 2: dance
presentation
- Group 3: acting on role
play
Video Clip will be
shown for their
respective chosen
interest as guide to
their presentation.
Productive Pedagogies – Cultural
Knowledge - Cultural identity if
represented in such things as
belief, languages, practices and
ways of knowing.
Productive Pedagogies – Cultural
Knowledge - Cultures are valued
when there is explicit
appreciation of these
characteristics, and within the
curriculum this requires that a
range of cultures are
acknowledge and given status.
Productive Pedagogies –
Inclusivity - Inclusive classroom
practices intentionally
acknowledge, support and
incorporate the diversity of
students’ diverse backgrounds,
experiences and abilities.
Knowledge Integration –
Integrated school knowledge is
identifiable when either (a)
explicit attempts are made to
connect two or more sets of
subject area knowledge, or (b)
no boundaries between subject
areas are readily seen.
Connectedness to the world –
Connectedness describes the
extent to which the lesson has
value and meaning beyond the
instructional context, making a
connection to the wider social
context within which students
live.
 Local map of
available within the
local community
 Make a list of criteria
for purchasing
 Illustrate through a
Venn Diagram the
similarities of different
categories comparing
availability of
of the students’ local
community with other
communities
 Enumerate the
responsible ways in
the purchasing
activities of an
enterprise
 Enhance individual
different art skills

Republic of the Phillippines
Department of Education
Region X – Northern Mindanao
Ozamiz City Division
Culture-Based Lesson Exemplar
Year Level Selected: IV Year
Subject: Technology and Livelihood Education – Entrepreneurship
I. OBJECTIVES:
General Competency: Perform Purchasing of Production Materials
 Identify criteria in purchasing production materials.
 Recognize the importance of set-criteria in purchasing production materials.
 Learn the benefits and factors in purchasing goods by using set of criteria.
 Utilize standard inventory control of the production materials.
 Identify local sources necessary in the purchase of production materials.
 Perform local mapping.
II. SUBJECT MATTER
A. Lesson: Identify Criteria in Purchasing Production Materials
B. References:
- Competency Based Curriculum 4th Year – Entrepreneurship
- The Importance of Selection and Evaluation of the Supplier in Purchasing
Management – by Bruno Završnik
C. Materials:
1. Local Riddle –
2. Local Game Koruk (Stones) –

3. Video Clips Subanen Buklog Dance and Colonial Mentality
4. chalk, board and eraser
5. paper and pencil/ballpen
6. Fact sheets
7. Pictures of Colonial Mentality

III. LEARNING TASKS/ACTIVITY:
1st
Day
Motivation:
Instructions: Begin the lesson by letting the students guess answers for the riddles enumerated
below.
Riddles:
1. Isang balong malalim, punong-puno ng patalim. Ans: bibig
2. Isang butyl ng palay, sakop ang buong buong bahay. Ans: ilaw
3. Ako ay may kaibigan, kasama ko kahit saan. Ans: anino
4. Naligo ang kapitan, hindi nabasa ang tiyan. Ans: bangka
5. Dumaan ang hari, nagkagatan ang mga pari. Ans: siper
6. Limang puno ng niyog, isa’y matayog. Ans: daliri
7. Nang hatakin ko ang baging, nagkagulo ang mga matsing. Ans. kampana
8. Baboy ko sa pulo, ang balahibo’y pako. Ans: langka
9. Tigmo, tigmo agokoy, ugma ra kita mag-asoy. Ans: damgo
10. Kabayo ni Adan, dili moka-on ug dili kabay-an. Ans: kudkuran
Lesson Proper:
The teacher presents the objective of the class for the day. Then ask the students how are
Philippine riddles composed. They would be able to explain how it’s being composed by giving
their ideas from lessons learned in Filipino subject regarding Panitikan: Bugtong.
Bugtong have criteria such as: A Pilipino bugtong (riddle) is short, one-liner statement which
consist of two phrases. Each phrase refers to an image or characteristic of an image, which
symbolizes another object that is to be identified. And the two phases ends in words that rhyme.
The object to be identified must relate to our daily lives, personal experience, and observation of
common things around us.
Fact Sheets 1 (see attachment) regarding The Importance of Selection and Evaluation of the
Supplier in Purchasing Management will be distributed to students for purposes of individual
reading within 10 minutes, to get basic information on the topic.

Application:
Activity (Game)
Instructions: The students are required to play the game Koruk by following the instruction of the
game.
Process:
There must be six (6) stones with one (1) having the bigger size among the rest. The bigger
stone “pamato” will be the one to be tossed up in the air, while the 5 other stones are in the
ground.
The first segment of the game is to throw five (5) stones on the ground. Get the bigger stone
“pamato” then tossed it up in the air, before the “pamato” falls down and is being caught by
the player, she needs to pick up one stone from the ground. This is done until all five (5)
stones were picked.
The second segment is to do the same thing with the first segment except the player needs
to pick up two stones in the second segment. The same will be done with the third segment,
fourth segment, and fifth segment. The only difference is on the number of stones being
picked on the third, fourth and fifth segment.
On the other hand, there are specific rules to be followed, that is if in case the bigger stone
“pamato” was not caught in the air but rather falls on the ground; or if the player touches
any stones that were not supposed to be touched, and the next player gets the turn to play.
A teacher-student interaction follows.
Evaluation:
The students are now instructed to identify set of criteria of the bugtongan and game Koruk
which shows a relation to identifying criteria in purchasing production materials. They will now
be writing down their viewpoints in a ½ manila paper of the importance of set-criteria in
purchasing production materials and post it in the board.
Assignment:
The students are grouped according to the place of residence for them to map at least four
sources of production materials within their community. They have to draw a map in a long size
bond paper and label it accordingly. To be submitted on the 3rd Day.

2nd
Day
 Differential between benefits and factors in purchasing activity.
Motivation:
The class will be grouped into 5 groups and will listen to a write-up regarding Bayle Benepisyo or
Benefit Dance.
Process:
This was an invitational social activity wherein ladies with their parents or chaperon were
invited for a dance in a certain barrio for sociability to be able to raise funds. Young officials
in the barrio initiated this activity with the guidance of the elders. The ladies and parents
were well-respected. They were warmly welcomed. Barrio officials treated, entertained and
gave importance to the ladies and parents by offering foods like bread, rice cakes, suman
and drinks like coffee and “koter (tuba with chocolate).” Ladies sat on the chairs or benches
as the music starts. They were well-groomed and properly dressed with long skirts or below
the knee kind of skirts. As the music plays, gentlemen chose among the ladies who they
would like to dance with. The gentlemen were well-groomed too. They were not allowed to
dance if they were not properly dressed from head to feet. The men polish their hair with
pomade. They were wearing formal attire like Americana vest, black pants and formal
leather shoes. If they didn’t have this kind of outfit, they borrowed from their friends.
Music is played through a “kumparsa.” This was played using different kinds of musical
instruments like flute, trumpet, guitar, ukelele, and banduria. The music had no lyrics,
only instrumental. Gentlemen will buy ribbons; they cannot dance without the ribbons.
There were four colors of ribbons such as red, blue, yellow and white. If a man had much
money, then he can buy the 4 colors of ribbons. So, he can dance anytime he wants. The
host of the activity announces what color of the ribbon was allowed to dance in a particular
music. Another way of raising more money from the benefit dance was dancing to a
beautiful lady; they called it “baligya’g bulak” wherein the gentleman will keep on giving
money to the in-charge of the activity and will say “the same buyer.” Meaning, he keep on
paying or buying the flower (refers to the lady) and wanted to dance with the lady he love or
like most and don’t want to sell or hand her to others. Usually, gentlemen who are well off
can afford this. If two or more gentlemen can afford it, then “first come first serve” policy
will be the basis. Others or the rest of the boys will just watch and wait. After the dance
activity, officials gave them thanks.
According to what they have heard about the benefit dance, each group will present a 3 minutes
enactment on how it is being done.
Lesson Proper:
The teacher presents the objective of the class for the day. A review of the previous lesson will be
done. And sharing to students the importance of following procedure just like in scientific method
“investigating a phenomena”.

Activity (Group Sharing Activity)
After the group has presented their enactment, they will now be brainstorming on the benefits
and factors they could find from the bayle benepisyon activity. And by relating to Mathematics on
factoring (finding what to multiply together to get an expression) they will be reminded on
splitting an expression into multiplication of simpler expressions. The same way as splitting the
Bayle Benepisyo criteria into smaller instructions. The group leader will enumerate it in class.
Fact sheets 2 (see attachment) on identifying criteria in purchasing production materials will be
distributed to students for purposes of individual reading within 10 minutes. After then, student
– teacher interaction follows with regards to the information in the fact sheets and their report.
Assignment:
The day 1 grouping of students will be utilized for the group mapping activity to summarize all of
the mapped production resources. The students will be ask to draw the map in a ½ manila paper
and to present it in class on the 3rd day.
3rd
Day
Motivation:
Show them video clips of the Buklog Subanen Dance. Then the students will be instructed to list
down by group the production materials which they will be needing if they are to build a
structure for the dance.
Lesson Proper:
After the listing of the production materials they need for the construction of the Buklog Subanen
Dance structure, they will then be ask to indicate from their map where to purchase for the
production materials. And of course remind them of the negative effects of colonial mentality in
the purchase of production materials.
Activity 1 (Mapping Presentation)
The class will then present each groups’ mapping on the board. Each group leader will be
explaining their work.
Assignment:
The students will be group according to their interest to wit:
Group 1: Visua Arts form art exhibit on Colonial Mentality.
Group 2: Dance Presentation Buklog Subanen Dance
Group 4: Acting or Role Play on Colonial Mentality

4th
Day
 Differential between benefits and factors in purchasing activity.
Activity 1 (Showcase of skills)
Showcasing of students differing skills.
Activity 2 (Reflection)
The students will write a reflection in a sheet of paper regarding the activities undertaken during
the lesson.
Individual reflection with a guide questions:
a. What are the criteria in purchasing production materials?
b. How important are set of criteria is in purchasing production materials?
c. What are the benefits of purchasing goods by using set of criteria?
d. What are the factors in purchasing goods by using set of criteria?
e. Identify the sources necessary in the purchase of production materials related to the
Group performance you have.
f. Locate in your mapping to which you can purchase the production materials of your
group presentation.
g. Did you find this activity helpful in your community?
Reflection Rubrics
The following are used to assess your reflection.
Equivalent Rating
0 = not addressed
2 = completely (lacks proofing - no critical thinking)
4 = incomplete (incorrect - criteria not followed – minimal critical thinking - not there yet)
6 = average (met requirements - proof a bit more – moderate critical thinking - needs a little
reworking)
8 = almost (critical thinking obvious - looks pretty good)
10 = I’m impressed (all criteria followed in depth & with analysis and insightful critical thinking -
extra stretch- wow)
Prepared by:
JEANELEI L. CAROLINO
Teacher I
Approved by:
CESAR T. PONCE JR.
HT III, TLE Department

Attachment
Fact Sheets 1
THE IMPORTANCE OF SELECTION AND EVALUATION OF THE SUPPLIER IN PURCHASING
MANAGEMENT
This paper demonstrates how important purchasing management is today because the profit
potential of effective management of the purchasing and supply activities is enormous compared
with other practical management alternatives. The procurement process has many major tasks. One
of the most crucial is the selection of the right supplier. The right supplier provides the right quality
of materials, on time, at the right price, and the right level of service. Any purchasing is only as good
as the sources (suppliers) that it buys from. Purchasing managers can choose different purchasing
and sourcing strategies, which help them to make the best decision. In today’s global market, more
and more companies become dependant on suppliers from abroad. The motives for buying abroad
can range from quality to cost. In the implementation of international procurement, purchasing has
to engage in the customary tasks of the supplier’s identification, evaluation and selection. The
evaluation of actual and potential sources is a continuing process in the purchase department and
must be done at least once a year.
1. INTRODUCTION
Today, most firms would agree that the purchasing function should be an integral part of the
operation of the enterprise. All the functions of a business must mesh into a unified whole if
management is to fulfil its basic responsibility of optimizing company profit. Each function must
shoulder its portion of this responsibility. For the typical manufacturing firm, purchasing is
responsible for spending more than half a dollar the firm receives as income from sales. More
dollars are spent for purchases of materials and services than for all other expense items
combined, including expenses for wages, depreciation, taxes, and dividends (Dobler, 1996, p. 24-
25). Figure 1 details materials and other costs.
Figure 1. Costs of a manufacturing company (adapted from Dobler, 1996, p.26).
Purchasing also has a very important role for savings costs and making profit. Let us assume that
a company has a profit margin of 10 percent and the cost of goods purchased is 50 percent of
sales. This means that if the company sold Php1 million a year, the following breakdown would
represent costs and profits (Fernandez, 1995, p.8):

Sales Php1,000,000
Manufacturing and overhead costs (40 percent of
sales)
Php400,000
Cost of products and services purchased (50
percent of sales)
Php500,000
Total costs Php900,000
Profit (10 percent profit margin) Php100,000
Now, let us examine the effect of a 10 percent decrease in cost of products and services
purchased for the same company, assuming that both sales and the sales price remain the same:
Sales Php1,000,000
sales)
Php400,000
percent of sales)
Php450,000
Total costs Php850,000
This analysis shows that reducing the cost of goods and services purchased by only 10 percent
actually represents a 50 percent increase in profit, assuming that the sales prices and total sales
do not change. This same effect would require a 50 percent increase in sales with the original 10
percent profit margin and no reduction in cost of products and services purchased:
Sales Php1,500,000
sales)
Php600,000
percent of sales)
Php750,000
Total costs Php1,350,000
One can conclude from this analysis that the effect of reducing the cost of products and services
purchased is equal to a much larger percentage increase in sales. Which is preferable: to work
with suppliers to reduce costs by 10 percent or to spend time and energy trying to increase sales?
In some companies with limited markets, this may not even be a valid question.
In procurement, the activity, which in a sense underlies the realization of all other objectives of a
good purchase decision, is the selection of the supplier. Even when a buyer may have done his
homework in identifying the right product to meet his needs, the achievement of the buyer’s
objective will ultimately depend on how well his selection of the supplier has been. The buyers
must ensure that the supplier is able to provide goods, which conform to the buyer’s standards
and specifications. If the supplier ultimately ships goods, which do not meet the buyer’s
requirements, all his other objectives will also not be realized.
Thus, the importance of selecting a dependable and reliable supplier is self-evident. It is in this
context that supplier assessment and evaluation has received great attention in procurement
management. The procurement task has become more complex and the need for sourcing of

reliable and dependable suppliers has become more important than even before. The search for
an acceptable supplier can be greatly assisted by adopting a systematic approach to supplier
appraisal and evaluation.
Selection and management of the right supplier is the key to obtaining the desired level of quality,
on time, and at the right price; the necessary level of technical support; and the desired level of
service. Buyers must take six important supplier-oriented actions in order to satisfy this
responsibility (Dobler, 1996, p.214):
1. Develop and maintain a viable supplier base
2. Address the appropriate strategic and tactical issues
3. Ensure that potential suppliers are carefully evaluated and that they have the potential to be
satisfactory supply partners
4. Decide whether to use negotiation as the basis of source selection
5. Select the appropriate source
6. Manage the selected supplier to ensure timely delivery of the required quality at the right
price.
2. SOURCE DECISION MAKING
Effective source decisions will only be made when all relevant factors have been considered and
weighted against the risks and opportunities which apply. Not all source decisions will justify the
same level of attention, but major purchases will always repay careful decision making.
Sourcing, thus, involves much more than simply picking a supplier or contractor for each
requirement in isolation. It involves continuing relationships, both with preferred sources which
are actually supplying goods and services, and with potential sources which may have been
passed over for the present but are still in the running. It involves decisions about how to allocate
the available business, and on what terms to do business (Baily, 1998, p.140-141):
a) Attributes of a good supplier
While a definition of a good supplier which would be acceptable to everybody would be difficult to
write, there are a number of attributes which might be regarded as desirable for a typical
relationship. The following list is given by way of suggestion only.
 Delivers on time.
 Provides consistent quality.
 Gives a good price.
 Has a stable background.
 Provides a good service backup.
 Is responsive to our needs.
 Keeps promises.
 Provides technical support.
 Keeps the buyer informed on progress.
b) Different types of sourcing
There are many different types of source decisions:
 consumable supplies;
 production materials and components;
 capital purchases (e.g. machinery);

 intellectual property (e.g. software):
 subcontractors; and
 services.
Each type will involve different factors.
c) Purchasing strategies
Accordingly, in procuring a variety of materials, services, and types of equipment, a purchasing
department is likely to pursue several purchasing strategies at once. Its array of potential choices
or strategy options will often include (Scheuing, 1989, p. 140-1419):
 Internal versus external sourcing
 Leasing versus buying
 Internal or external standardization
 Domestic versus overseas sourcing
 Single source versus multiple sources
 Stockless and Just in Time purchasing
 Co-operative purchasing
 Local versus national purchasing
 Distributors versus manufacturers
 Buying a supplier
 Forward buying
d) Sourcing strategies
Purchasing managers have to make decisions as to the type of sources that needed materials will
be obtained from. To guide them in these tactical choices and achieve consistent performance in
the long run, they have to develop sourcing strategies that form a coherent strategic framework
and help provide answers to such questions as:
 Make or buy?
 Lease or buy?
 Buy a source?
 How many vendors?
 Domestic or overseas sources?
 Local or national sources?
 Sourcing from distributors or manufacturers?
Purchasing managers must carefully select and evaluate the advantages and disadvantages of
either alternative to arrive at meaningful conclusions.
3. THE PROCESS OF SUPPLIER SELECTION
Supplier selection is central to the work of all buyers, and is probably the most important
function in the purchasing process (Erridge, 1995, p.151). The need to identify and select a new
supplier can arise from a number of reasons. A source used in the past may have gone out of
business. Its price may have risen unreasonably or its quality slipped to unacceptable levels. Its
technology may be outdated.
Whatever the reason for a supplier search, purchasing managers go through an important and
complex selection process to identify and obtain the source best suited to satisfy the firm’s
requirements. It begins with a scan of available information sources and finishes with the
selected supplier to the firms approved suppliers’ list (figure 2).

The purchasing manager has a lot of sources of supplier information (Scheuing, 1989, p.215-
217). These include published sources, internal sources, personal contacts and international
sources. Next, the purchasing manager formulates the selection criteria to be applied through
this specific process.
In most cases, where such decisions are made, the selection process is comprehensive. Included
among the criteria used by one company was the requirement that the supplier should have the
'necessary capabilities and experience’. This meant that a potential supplier (Baily, 1998, p.143-
144):
 was viable in the longer term financially, technically, and in production terms;
 would be able to participate in the early phases of product design and development as a full
partner in the process;
 would openly share information on the functional, assembly and the services requirements of
parts, including cost and quality targets;
 would be orientated towards taking cost out of product and improving total system
performance to mutual benefit;
 would be able to develop prototypes as well as manufacture volume production;
 would be prepared to agree to cost structure targets;
 would work with the buying company so as to increase their flexibility in meeting changing
demands and operate on a pull rather than a push basis, in the process, reducing their own
wastes such as inventory holding, unnecessary inspection and excess work in progress as well
as those of the buying company.
Sources of Supplier Information
Published Sources Internal Sources Personal Contacts International Source
Candidate List
Formulation of Selection Criteria
Preliminary Screening
Identification of Qualified Candidates
Detailed Study
Selected Supplier
Approved Supplier List
Information from
Market Research
Questionnaires
Financial Information
Supplier Visits
Rejected
Suppliers
Elimination
of Unqualified
Candidates
Non-approved Suppliers
Figure 2. Selecting a new supplier (Source: Scheuing, 1989, p.216)
Another multinational company, seeking partner suppliers of the same kind, formulated the
following criteria. The supplier should have:
 Sound business sense and attitude.
 A good track record in supplying the market in which the buyer operates (or similar).

 A sound financial base.
 A suitable technical capability with modern facilities.
 A total quality orientation.
 Cost effective management.
 Effective purchasing acquisition and control.
 Good morale among the workforce.
 Effective logistical arrangements.
 A customer service mentality.
The entire process includes different representatives, one or more engineers, a financial analyst
and others interested to join the purchasing manager in various phases of the selection process
as needed and appropriate. This is particularly important in the formulation of the selection
criteria and the detailed study of qualified candidates. However, the purchasing managers are
responsible for the selection process as a whole.
Once the selection criteria have been established, exploratory information is collected in an
informal fashion to weed out obviously unqualified supplier candidates early in the process.
Properly executed, a supplier selection process is expensive and time consuming. Exploratory
information will come primarily from published sources and a few phone calls to well-informed
persons within the organization, or in other firms.
These semi-finalists are then subject to an in-depth and detailed study phase. Here, they are
contacted and asked to complete prospective supplier questionnaires that provide answers to
many important questions. These answers are then reviewed by the team, together with financial
information. Only those suppliers who appear to be suited to the firm’s needs and are interested
in its business are then visited by the team, which conducts a plant inspection and holds
discussions with management.
Careful weighing of the evidence by the team members then produces a winner, who is
subsequently added to the firms approved supplier list. Common courtesy requires that the losing
suppliers be notified about the selection decision and be given reasons for their rejection.
4. IDENTIFICATION AND SELECTING INTERNATIONAL SUPPLIERS
Strategic global sourcing is defined as integration and co-ordination of procurement requirements
across world-wide business units, looking at common items, processes, technologies and
suppliers. There are many reasons why a buyer may decide to source from foreign suppliers
(Trim, 1994, p.70):
1. Cost benefits. Suppliers abroad may be able to offer lower prices than domestic suppliers. This
is especially true of manufactured goods which are produced with cheap labour, material and
overhead costs.
2. High quality technological know-how. Some countries have developed a reputation for
producing good quality products and some products are more advanced than those to be
found in the domestic market.
3. Greater competition. Competition has opened up opportunities both in the domestic and
international market.
4. Suppliers may be customers. This relates to the issue of reciprocity and it can be stated that
the world represents a potential market for the domestic producer.
5. Insufficient domestic capacity to meet demand.

However, on the other hand, there are a lot of difficulties in buying abroad:
1. Communication problems (Saunders, 1994, p.236):
 Different languages can cause communication and contractual difficulties
 Longer distances affect the feasibility of personnel visits and make close contacts more
difficult
 Different time zones affect direct telephone contacts
 The operation of different standards in different countries.
2. The time required for negotiation is generally longer than with home suppliers
3. Currency difficulties.
4. Legal difficulties. It is necessary to determine (Lysons, 1996, p. 184):
 What law shall govern the transaction?
 Arrangements for arbitration.
 Protection of buyer against infringements of patents.
 Protection of buyer against product liability.
5. Delays in delivery due to the weather, cargo transfer, dock strikes and customs action
6. Logistics problems:
 More complex transport and distribution arrangements increase costs and add to
uncertainty regarding delivery
 Longer distances may reduce the feasibility of operating on a just in time basis
 Problems in acquiring spares and replacements.
7. Important duties and insurance
8. Specifications, especially where there are differences in units of measurement.
Buying abroad is very complex and the buyer must acquire specialist knowledge regarding:
1. The country from which he intends to buy, i. e. its economic and political conditions and
policies
2. The supplier from whom he intends to buy, i.e. capacity, financial position, reputation and
reliability
3. The legal and commercial considerations and procedures involved in buying abroad, e.g.
ordering, transportation and payment.
Such information may be obtained from the following (Farrington, 1994, p.118):
1. Visits to the proposed international supplier
2. References furnished by the proposed international supplier
3. Commercial attaches and other government department of foreign nations
4. The department of Trade and Industry
5. Shipping and forwarding agents
6. The banks
7. Chamber of commerce
8. Directories, e.g. Kompass, Wer Liefert Was
9. Internet
10.Specialist inquiry agents, e.g. Dun and Bradstreet, Business International
11.Trade journals
12.Trade exhibits
13.IFPMM - International Federation of Purchasing and Materials Management
After carefully studying the environmental setting in a prospective source country and its impact
on business transactions, purchasing managers have to engage in the basic task of identifying,
evaluating and selecting appropriate sources in this country.

Having examined the environmental conditions in a prospective source country and identified
supplier candidates, the purchasing manager next has to qualify them in a preliminary fashion,
available at this point (figure 3). Once a number of qualified sources of supply have been
pinpointed in a given country, the purchasing manager will want to send them a set of
specifications concerning the material to be procured and a request for quotation. While technical
specifications are identical from one country to the next, international price quotations are
usually requested in the form of landed price. This would make a price quote from an
international supplier comparable to that of a domestic source.
With quotations from interested suppliers in hand, the purchasing manager can begin the
weeding out process. This will include contacting references and obtaining financial reports from
international banks. For the semi-finalist, it will also mean on-site visits to evaluate technological
and management competence. Upon completion of an on-site visit, the buyer writes a detailed
report, summarizing the findings and impressions of the team and outlining the reasons why this
supplier would or would not make a good source.
The next step is placing a small trial order with one or more of the companies to see how well they
live up to their commitments in terms of the delivery schedule and output quality. Suppliers who
perform satisfactory on trial orders are then placed on the approved supplier list and are given
regular full-sized orders. Supplier development should also extend to analysing how the vendors’
own system and procedures can be integrated more closely with the customers (Christopher,
1994, p.207). Considerations important in foreign source qualification (Carter, 1993, p.121) are
the experience of the supplier as a foreign source and manufacturer, financial strength of the
supplier, the ease with which effective communication can be established, and implications for
inventories (size, location, and so on.).
Figure 3. The International purchasing process (adapted from Scheuing, 1989, p.340)
5. SUPPLIER EVALUATION
The organization (buyer) is in a much better position to evaluate an existing supplier, based on
his past performance than is the case with a new supplier. The techniques and methods of this
evaluation usually tend to concentrate on performance in regards to different factors. Task

variables which determine the choice of supplier are traditionally stated as: quality, quantity,
timing, service, and price.
Service includes before-sales service for some products, and after-sales service for others. Prompt
and accurate quotations, reliable delivery times, ease of contact with persons in authority,
technical advice and service, availability of test facilities, willingness to hold stocks; these are just
some of the varied things that make up the package called service. Good service by the supplier
reduces the buyer’s workload, increases the usefulness or availability of the product, and
diminishes the uncertainty associated with making the buying decision.
Financial stability is one of several supplier characteristics not mentioned as a task variable, but
which is nevertheless important. Buyers prefer suppliers to be reasonably profitable because they
are interested in continuity and on-time delivery. A supplier with cash-flow problems will have
difficulty paying their bills, and consequently in obtaining materials, their delivery times and
possibly product quality will probably suffer.
Good management is also important. Well managed suppliers improve methods, reduce costs,
develop better products, deliver on time, have fewer defective products, and build high morale in
their workforce.
On-the-spot surveys of facilities and personnel by technical and commercial representatives of
the purchaser are often carried out to evaluate potential suppliers - although sometimes it may
be possible to eliminate this on the basis of a supplier's reputation, as obtained from word of
mouth and published information.
If the supplier's establishment is to be visited for evaluation purposes, most purchasers prepare
in advance a checklist to remind investigators of what to look for and to record their findings.
Many firms use multiple page checklists, asking many questions.
Finally, the supplier is evaluated for named products or processes as fully approved, approved,
conditionally approved, or unapproved. Variations of the checklist approach are legion, and
changes and improvements are incorporated as the needs of the organisation change (Baily,
1998, p.148). Typical checklist questions are:
 Do they trade with our competitors
 Are confidential documents properly controlled?
 Does the buyer have technical support?
 How do they search the market and how often?
 How long have they been established?
 What are their investment plans?
The contents of such checklists are devised to suit individual requirements. For checking the
quality capability of a supplier it is, however, possible to standardise checklists. The international
company Gorenje has different factors for evaluating the existing domestic and international
suppliers. The most important are:
1. Quality of purchasing materials
2. Delivery schedules
3. Price
4. Terms of payment
5. A-test

6. Confirmation of the purchase order
7. Packaging
8. Standardisation
9. Location of plant
10.Services
Suppliers are evaluated for all these factors. The scoring system is 0-5 points for the first five
factors and 0-3 points for the next five factors. Total possible points are 40.
0 - 15 points - supplier not accepted
16-30 points - supplier accepted conditionally
31-40 points - supplier accepted
On the basis of these factors, the evaluated supplier is accepted or rejected. Evaluation for all
suppliers must be at least once a year.
SUPPLIER:
Delivery On time
5
Earlier
4
1x delay
3
2x delay
2
More delay
1
Quality Excellent
5
Good
4
Acceptable
3
1x reclamation
2
2x reclamation
1
Price The lowest
5
Low
4
Average
3
High
2
The highest
1
Terms of
payment
90 days
5
75 days
4
60 days
3
Letter of credit
2
Less than 60 days
1
A-test For all
materials
5
For most
materials
4
For some
materials
3
In procedure
to get
2
No attest
1
Confirmation the Purchase
order
Always
3
After urge
2
Never
1
Standardisation Always
3
Sometimes
2
Never
1
Services Excellent
3
Good
2
Poor
1
Packaging To
specification
3
Sometimes to
spec.
2
Not to specification
1
Location of supplier 0-100 km
3
101- 500 km
2
More than 500 km
1
TOTAL POINTS:
Table 1. Supplier evaluation
6. CONCLUSIONS
Purchasing is an essential business function that should make the same level of contribution to a
firm’s success as the other major business functions. Purchased materials consume more than a
half of the average manufacturing firm’s sales revenue. There is no doubt that the most important
purchasing decisions are concerned with selecting the right sources of supply. If the correct
source decision is made in a particular instance, then the buying company’s needs should be met
perfectly. Finally, the buyer should evaluate developments in the supplier’s performance. The
objective of supplier assessment is to determine the extent to which a particular supplier will be
able to meet his delivery obligation, both now and in the future.

Bibliography:
1. Baily, P., Farmer, D., Jessop, D. Jones, D., Purchasing Principles and Management, Pitman
Publishing, London 1998.
2. Carter, J.R., Purchasing – Continued Improvement Through Integration, Homewood, Business
One Business, 1993.
3. Chrisstopher, M., Logistics and Supply Chain management, Pitman Publishing, London 1994.
4. Dobler, D.W. Burt, D.N.: Purchasing and Supply Management, New York, McGraw Hill, 1996.
5. Erridge, A., Managing Purchasing, Butterworth Heinemann, Oxford, 1995.
6. Farrington, B., Managing Purchasing, Chapman & Hall, London 1994.
7. Fernandez, R., Total Quality in Purchasing & Supplier Management, St.Lucie Press, 1995.
8. Lysons, K., Purchasing, Pitman Publishing, London, 1996.
9. Saunders, M., Strategic Purchasing & Supply Chain Management, Pitman Publishing, London
1994.
10.Scheuing, E.E., Purchasing Management, Prentice Hall, Englewood New Jersey 1989.
11.Trim, P., The Strategic Purchasing Manager, Pitman Publishing, London 1994.

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