This document outlines various methods for selecting suppliers in international procurement. It discusses evaluating suppliers based on their ability to meet quality, quantity, delivery and other objectives. Potential supplier sources are identified through online directories, trade publications, sales representatives and more. Suppliers are then evaluated on their technical capabilities, financial stability, and ability to meet requirements now and in the future. Evaluation methods range from informal discussions to formal weighted point systems assessing factors like delivery performance. Challenges in evaluating suppliers include determining strategic importance and availability of alternatives. Sourcing must be linked to organizational strategy addressing issues like single vs multiple sourcing and domestic vs international suppliers.

1. METHODS FOR
SELECTING SUPPLIERS
In INTERNATIONAL
PROCUREMENT

2. Supplier Selection Decision
• The decision to place a certain volume of business with a
supplier based on a reasonable set of criteria.
• Analysis of the supplier’s ability to meet satisfactory quality,
quantity, delivery, process/cost, and service objectives
governs this decision.
• Suppliers attributes related to these prime criteria may
include past history, facilities and technical strength,
financial status, organization and management, reputation,
systems, procedural compliance, communications, labour
relations, and location.
• The nature and amount of the purchase will influence the
weightage attached to each objective.

3. Identifying Potential Sources
The identification of potential sources is a key driver of the ultimate success or
failure from a performance perspective.
Knowledge of source is a primary qualification for a Buyer
.
Online Sources.-
Catalogues
Trade Journals
Trade Directories
Sales Representatives
Supplier and Commodity Databases
Visits to Suppliers
Samples
Colleagues
References

4. The Evaluation of Potential
Sources
The evaluation of potential sources, therefore, attempts to answer two key questions:
Is this supplier capable of supplying the purchaser’s requirements satisfactorily in both the
short and long term ?
Is this supplier motivated to supply these requirements in the way the purchaser expects in the
short and long term ?
While evaluating potential sources, the most common major factors are
Technical or engineering capability, manufacturing or distribution strength
The most obvious factor is the quality capability of the supplier.
Should the supplier be a distributor, the stress might be more on distribution capability.
Financial stability.
The evaluation of the supplier, therefore, should focus not only on current capability,
but also on the supplier’s future strengths.

5. Supplier Evaluation Methods
The evaluation and selection process can be highly informal or highly
structured and formalized depending on the nature of the purchase.
Informal and Semiformal Evaluation and Rating:-
Information evaluation includes assessment of the supplier by internal users
and others anywhere in the buying organisation where such contact takes
place. As the buyer-supplier network grows in complexity, the need to have a
more-formal system for evaluating current sources also increases.
Executive Roundtable Discussions:-
One simple semiformal supplier evaluation took is the regular, annual
discussion between top executives in the buying organization and those of the
supplier. The presence of top executives of both sides lends weight to the
occasion and permits discussion of past performance; future expectations;
economic, social, and technological trends; long-term plans.

6. Supplier Evaluation Methods
Formal Supplier Evaluation and Rating:-
Often, continuous improvement is tracked along with more traditional factors
such as quality, quantity, delivery, and price using sophisticated methods such
as purchasing process software on realtime basis.
Different levels of delivery performance are described and assigned a category
rating (excellent, good, fair, poor).
Excelent : a. Meets delivery dates without expediting.
b. Requested delivery dates are usually accepted.
Good : c. Usually meets shipping dates without substantial follow-up
d. Often is able to accept requested delivery dates.
Fair : e. Shipments sometimes late; substantial follow-up required.
Poor : f. Shipments usually late, delivery promises seldom met;
expediting required.

7. Supplier Evaluation Methods
Weighted Point Evaluation Systems:-
Many organizations rate suppliers by assigning points a scales to each factor
and each rating Where several sources supply the same goods or services,
such schemes permit cross-comparisons.
Identify the factors or criteria for evaluation.
Determine the importance of each factor.
Establish a system for rating each supplier on each factor.
Use Computerised system.

8. Evaluating Potential Suppliers:
Challenges
Is the supplier strategically important ? If the supplier provides a product, or
access to a future product, that is critical to the buying firm’s success, take the
time.
Is the product or service being procured considered strategic ? If yes, then take
the time to perform the evaluation.
Are there other short-term alternatives available ? If supply management can
modify the request to allow another product, service, or supplier to be quickly
substituted, then they can reduce the thoroughness of the evaluation.

9. LINKING SOURCING WITH
STRATEGY
The first level of analysis is finding out which suppliers might be able to meet
the buying organization’s requirements.
The second level of analysis is determining which of these the supply
manager or sourcing team is willing to seriously consider as a source.
A category or commodity –sourcing strategy should be in place and address
all the factors that influence the ability to maximize value to the organization
from this particular sourcing decision.
This strategy drives the process.

10. LINKING SOURCING WITH
STRATEGY
Issues that must be addressed at a high-level, strategic perspective.
Should we use a single source, dual sources, or more than two ?
Should we buy from a manufacturer or a distributor ?
Where should the supplier be located ?
Relative to our organization, should the supplier be small, medium or large
?
Are the social, political, ethical, legal or environmental issues we should
consider ?
Should we purchase for a supplier ?
Should we purchase for company personnel ?
What risks might the organisation expose itself ?