all about logistics management

1. Supplier Selection
Process and the Legal
Aspect of Purchasing
GROUP 4 - CHAPTER 4

2. ‹#›
SET OF REPORTERS
Artajo,
Rumnor
Balendez,
Sheinlie
Caballero,
Clarish
Duran,
Althea
Sembrano,
Roselyn

3. LEARNING OBJECTIVES:
Identify the selecting the ideal supplier;
Identify the criteria in selecting a good
supplier;
Give the important requirements for the
development of effective supplier
relationship;
Identify the factors in the development of
strategic alliance in supply chain.

4. SELECTING THE
IDEAL SUPPLIER
1
1

5. Selecting the ideal supplier involves
considering various factors beyond just
price. It's important to assess factors
such as quality, reliability, service, and
how they align with your business
priorities and strategy.
2

6. 5 ESSENTIAL
STEPS
FOR FINDING THE RIGHT SUPPLIERS FOR
YOUR RAW MATERIALS
3

7. Here are five critical steps to help you locate the finest
suppliers for your goods, components, or raw materials:
SET YOUR CRITERIA
1.
Setting the criteria in advance will
enable you to evaluate potential
suppliers on each of the listed
items and ensure that you don't
overlook any important
requirements.
4

8. List of the supplier's selection criteria that companies need to fulfill to
be able to provide you with the items you need. This include issues like:
Ideal lead time
Maximum and minimum order quantity
Storage and handling facilities
Specific methods of delivery
Sustainability issues
Quality assurance processes
Payment terms and conditions
Return policy
Contactable references 5

9. The selection process of the
correct supplier is one of the
most important activities of the
purchasing department.
THE CRITERIA IN SELECTING A GOOD SUPPLIER
6
Suppliers plays a crucial role in
helping companies succeed. In
order to find the right ones,
businesses need to consider
number of factors.

10. SUPPLIER CHARACTERISTICS
7
COST
1.
QUALITY
2.
DELIVERY
3.
LOCATION
4.
CAPACITY
5.
FLEXIBILITY
6.
LEAD TIME
7.
Reputation
Certifications
Collaboration
Customer Base
FInancial Health
Social Responsibility
Product Development

11. 2. BROWSE YOUR OPTIONS
8
If you know what sort of goods you want to sell, you should check a
supplier directory to discover whether providers meet your requirements.
Use this time to examine your potential providers according to the following
criteria:
Reputation
Business type
Security
When looking for suppliers, it is critical to read evaluations from other
organizations. This may offer you a better sense of how a provider will
satisfy your expectations than anything else.

12. 3. CALL FOR BIDS
9
after selecting the process you chose, put out a call for bids. You may have
to fill out a Request for Proposal (RFP) form or a Request for Quotation
(RFQ) form. During this process, you can also communicate with vendors
about its processes and policies.
Whatever form it takes, it should include complete data about the items or
services you want, as well as quantities, delivery dates, and quality
requirements specified in your criteria. Request that bidders offer thorough
information on the procedures they employ, the stability of their raw
material sources (if applicable), and why you should pick them.

13. 4. EVALUATE THE BID SUBMISSIONS
10
Compare every supplier to determine which one best suits your budget and
quality requirements. You should also pay close attention to price, since
you don't want to hire a supplier who costs too much for their items,
reducing your profit margin.
You should also do additional check to validate the veracity of your
supplier's proposal. Once you've chosen a bid, contact your supplier to
discuss contract details. Make sure your contract has advantageous pricing
that supports your profit margin.

14. 5. MONITOR SUPPLIER PERFORMANCE
11
Once you’ve had a chance to implement your supplier performance
management system, you need to start reviewing results. Analysis of your
key indicators may reveal inadequacies that require remediation.
Depending on how your team decides to score your suppliers, scorecard
analysis becomes more of a chore than an actionable tool for supplier
management. You may want to consider a more robust solution, like an app
that can handle the process and even automate parts of it for you.

15. DEVELOPMENT OF EFFECTIVE
SUPPLIER RELATIONSHIP
3
12

16. 13
Supplier relationship
management (SRM) plays a
vital role in the success of
any procurement function.
A strong and collaborative
relationship with suppliers
can lead to improved
efficiency, reduced costs,
and increased innovation.

17. By implementing strategies such as...
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Clear communication and Expectation
Supplier performance measurement
Collaboration and Partnership
Supplier development programs
Risk management
Performance-based contracts
Technology enablement

18. DEVELOPMENT
OF STRATEGIC
ALLIANCE
15

19. 16
A strategic alliance is an arrangement
between two companies that have
decided to share resources to
undertake a specific, mutually
beneficial project.
A strategic alliance agreement could
help a company develop a more
effective process.

20. 17
Strategic alliances allow two
organizations, individuals or other
entities to work toward common or
correlating goals.
A strategic alliance agreement could
help a company develop a more
effective process.

21. 18
Strategic alliances diversify
revenue streams, grant access to
potentially difficult-to-obtain
resources, and may improve a
company's public image.
Strategic alliances may also
cause companies to expend
resources resolving conflict, not
yield results as expected, or
negatively impact a company's
public image.

22. STRATEGIC
ALLIANCE AND
COOPERATION
MUST CONSIDER THE FOLLOWING:
19

23. Compile supplier’s record of key contact suppliers
1.
20
The records must contain information on key management contact and other key areas
that are needed by the production department.
It must contain the table of organization and functions of the different supplier units.
The buying firm should clearly establish expectations for the strategic supplier’s future
plans and development.
2. Supplier’s performance audit
The buying organization must conduct audit on a periodic bases.
Reward system must be given to excellent suppliers.
On the other hand, poor performance must also be communicated to the supplier on
special conferences.

24. 3. Supplier’s use of new technology in production of materials
21
Suppliers could not stay competitive in the supply chain management with old and
outmoded production system.
The world market is in the race for modern equipment and facilities to keep pace with
the changing market demand.
Example: Robotics and Autonomation
4. Supplier and buyer service relationship
The buying firm should require their strategic supplier to meet or even exceed their
performance of quality products and services.
But how does the strategic supplier will know if they exceed their performance of quality
products and services? CUSTOMER SERVICE.

25. 22
·It is necessary for the buying organization to have strategic supplier who understands
their total cost of operations, especially in the management supply chain.
5. Environmental and the ethical standards of strategic suppliers
Great factors that will affect supplier-buyer relations;
1) Pollutions
2) Environmental degradation
Ethical standard is another important factor in any buyer-supplier relations.

26. CREDITS
Logistics Management (PRACTICAL APPROACH TO
PURCHASING AND INVENTORY MANAGEMENT) by Dr.
Pedrito Real Pereda
https://www.business.org/finance/inventory-
management/how-to-choose-the-right-supplier-for-
your-business/
THANK YOU!