Supplier Selection

Supplier SelectionTraining for Selecting the Right Supplier

by

Scott Mathusek

10 April 2010 1Supplier Selection

What will be covered

• Supplier Selection Defined

• Brainstorming Exercise

• Supplier Evaluation and Selection Process

• Real World Example

• Practice Exercise


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)


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?


Evaluation and Selection Process

1. Recognize the need for supplier selection

2. Identify key sourcing requirements

3. Determine sourcing strategy

4. Identify potential supply sources

10 April 2010 Supplier Selection 5

Evaluation and Selection Process

5. Limit suppliers

6. Determine method of supplier evaluation and selection

7. Negotiate and select supplier


Recognize Need for Supplier Selection

• Why are you looking for a supplier?– End of contract– Problems with current supplier– Have new product


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


Carter’s 10 C’s of Supplier Selection

• Competency

• Capacity

• Consistency

• Control of Process

• Cost/Price


• Commitment to quality

• Cash/finances

• Clean

• Culture and relationships

• Communication

Determine Sourcing Strategy

• How many suppliers are you going to need?– Single Source– Multiple Source


Identify Potential Supply Sources

• Where can you find your suppliers?

• Simple brainstorming activity will generate a long list of possibilities


Limit Suppliers in Pool• Narrow down your choices

10 April 2010 Supplier Selection 12DB C EA

100%100%

75% 75%

25%25%

33%33%

18%18%31%31%

36%36%

40%40%

22%22%

43%43%

57%57%

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 evaluations


Negotiate and Select Supplier

• Perform negotiations with supplier

• Choose supplier and agree to terms


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/price


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 option



A B C DCompetency 77 90 76 85

Capacity 85 85 85 90Consistency 95 86 95 87

Control of Process 90 95 90 90

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

Process 10% 20% 25% 20% 20% 19%


MODE A B C DCompetency 23.1 27 22.8 25.5

Capacity 25.5 25.5 25.5 27Consistency 19 17.2 19 17.4

Control of Process 18 19 18 18Total 85.6 88.7 85.3 87.9

AVERAGE A B C DCompetency 24.1 28.1 23.8 26.6

Capacity 22.3 22.3 22.3 23.6Consistency 22.6 20.4 22.6 20.7

Control of Process 16.9 17.8 16.9 16.9Total 85.8 88.7 85.5 87.7

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 evaluation


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.


Documents

Supplier Selection