supplier selection
DESCRIPTION
10 Cs of Supplier SelectionTRANSCRIPT
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
10 April 2010 2Supplier Selection
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 3Supplier Selection
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 4Supplier Selection
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
10 April 2010 Supplier Selection 6
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
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
Carter’s 10 C’s of Supplier Selection
• Competency
• Capacity
• Consistency
• Control of Process
• Cost/Price
10 April 2010 9Supplier Selection
• 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
10 April 2010 Supplier Selection 10
Identify Potential Supply Sources
• Where can you find your suppliers?
• Simple brainstorming activity will generate a long list of possibilities
10 April 2010 Supplier Selection 11
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
10 April 2010 Supplier Selection 13
Negotiate and Select Supplier
• Perform negotiations with supplier
• Choose supplier and agree to terms
10 April 2010 Supplier Selection 14
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
10 April 2010 15Supplier Selection
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
10 April 2010 16Supplier Selection
10 April 2010 Supplier Selection 17
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%
10 April 2010 Supplier Selection 18
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
10 April 2010 19Supplier Selection
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 20Supplier Selection