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Assessment and selection of suppliers (Supplier Assessment Criteria…
Assessment and selection of suppliers
Supplier Assessment Criteria
Quality and quality accreditation
Functionality
Price, cost and cost structure
Cost structure of organization vs Cost of product from supplier
Delivery
Must be on time
Geographic Location
Time
Reduce lead time for organization and cycle time for supplier
Flexibilty
How suppliers respond to change
Volume
number of products
Variety
range of products
Mix
varying products
New Products
Service
Supplier attitude and work ethic
BBBEE
Systems
Tech and process capability
Supplier's tech skill and overall capability to provide
SCM
Must respect its place in supply chain
Ethical issues
Environmental and social responsibility
Financial status
Avoid struggling suppliers
Supplier selection process
Exploratory stage/ Pre assessment phase
Identify potential suppliers
Use several sources to find info about suppliers
Internet
Credit bureau
Reputation
Pre-screen to reject unsuitable suppliers
If supplier does not meet supplier assessment criteria then reject them
Selection stage/ Assessment phase
Conduct research on potentially suitable supplier
Supplier visits
Cross functional team visits suppliers
Get first hand info, worker attitude and extensive audit
Supplier surveys or questionnaires
Supplier provided information = Request for information
Choose the assessment method and analyse the suppliers
Informal
Judgement of executives
Low value, non-critical purchases
Formal
Weighted AVG performance
Semi formal
Executive round table + presentation
Select the supplier or suppliers
Supplier Management(maintenance)/Post Assessment phase
Ongoing measurement of supplier performance
USe weighted point evaluation
Weight x Scale = score
Supplir accreditation
Approved
Meets requirements of selection process
Preferred
Consistently meet required levels of service
Cost reduction
Delivery
Quality
Certified
highest honor for supplier
Supplier Relationship Management
Transactional
Arms length relationship and usually short term
Collaborative
Buyer and seller co-op to achieve cost effectiventss, quality and on time delivery
Alliance
Same as collaborative BUT existence of institutional,prudent trust.
Mutaully agreed upon