Assessment and selection of suppliers

Supplier Assessment Criteria

Quality and quality accreditation

Price, cost and cost structure

Delivery

Time

Flexibilty

Service

Systems

Tech and process capability

SCM

Ethical issues

How suppliers respond to change

Volume

Variety

Mix

New Products

Functionality

Cost structure of organization vs Cost of product from supplier

Must be on time

Reduce lead time for organization and cycle time for supplier

varying products

number of products

range of products

Supplier attitude and work ethic

Financial status

Avoid struggling suppliers

Environmental and social responsibility

Supplier's tech skill and overall capability to provide

Must respect its place in supply chain

Supplier selection process

BBBEE

Geographic Location

Exploratory stage/ Pre assessment phase

Selection stage/ Assessment phase

Supplier Management(maintenance)/Post Assessment phase

Identify potential suppliers

Pre-screen to reject unsuitable suppliers

Conduct research on potentially suitable supplier

Choose the assessment method and analyse the suppliers

Select the supplier or suppliers

Ongoing measurement of supplier performance

Supplir accreditation

Use several sources to find info about suppliers

Internet

Credit bureau

Reputation

If supplier does not meet supplier assessment criteria then reject them

Supplier visits

Supplier surveys or questionnaires

Cross functional team visits suppliers

Get first hand info, worker attitude and extensive audit

Supplier provided information = Request for information

Informal

Formal

Semi formal

Executive round table + presentation

Judgement of executives

Weighted AVG performance

USe weighted point evaluation

Approved

Preferred

Certified

highest honor for supplier

Supplier Relationship Management

Transactional

Collaborative

Alliance

Arms length relationship and usually short term

Buyer and seller co-op to achieve cost effectiventss, quality and on time delivery

Same as collaborative BUT existence of institutional,prudent trust.

Mutaully agreed upon

Low value, non-critical purchases

Weight x Scale = score

Meets requirements of selection process

Consistently meet required levels of service

Cost reduction

Delivery

Quality