Please enable JavaScript.
Coggle requires JavaScript to display documents.
MOOC 4: Supplier management - Coggle Diagram
MOOC 4: Supplier management
Supplier Selection and Management
Supplier selection and evaluation
Step 1: Recognice need for supplier selection
Step 2: Identify key sourcing requirements
Step 3: Determine sourcing strategy:
Single/Multiple sourcing, Short-term vs long-term contracts, need for design support, Full-service vs non-full-service suppliers, domestic/foreign suppliers, collaboration/arm's length relationship
Step 4: Identify potential supply sources
Step 5: Limit suppliers in selection pool:
Financial risk analysis, evaluation of supplier performance, evaluation of supplier-provided information
Step 6: Determine method of supplier evaluation and selection
: Evaluation from supplier-provided information, supplier visits, use of preferred suppliers, external or third-party information
Step 7: Select supplier and reach agreement
Liquidity Ratios
Current ratio = Current assets / Current liabilities
Quick ratio = (Cash + Receivables) / Current liabilities
Activity Ratios
Inventory turnover = COGS / Inventory
Fixed asset turnover = Sales / Fixed assets
Total asset turnover = Sales / Total assets
Days sales outstanding = (Receivables x 365) / Sales
Profitability Ratios
Net profit margin = Profit after taxes / Sales
Return on assets = Profit after taxes / Total assets
Return on equity = Profit after taxes / Equity
Debt Ratios
Debt-to-equity = Total liabilities / Equity
Current debt-to-equity = Current liabilities / Equity
Interest coverage = (Pretax income + interest) / Interest
Contract Management
Cost-based contracts
Cost plus incentive fee
Time and materials contract
Cost plus fixed-fee contract
Fixed-price contracts
Firm fixed price
Fixed-price contract with escalation
Fixed-price contract with incentives
Short-term contracts
Contract purchases that are routinely made over relatively limited time horizon
Long-term contracts
Made on continuing basis for specified or indefinite period (often >1 year)
Risk Management
Ten things to consider in your risk management plan
Incorporate Risk Management Into Your Strategic Sourcing Process
Have a Comprehensive Supplier Audit/Certification Program
Well Defined Risk Management Process
Contingency Plan
Monthly/Quarterly Supplier Risk Management Reviews
Continuous Improvement Plan
On-Going Reviews with Suppliers: Trust and Transparency = Less risk
Intelligent Capability
Supplier Mapping
Plan for When it Happens-What then
Ethics
Reciprocity
Giving preferential treatment to suppliers who are also customers
Personal buying
Procurement management department purchases materials or goods for personal neeeds of its employees
Accepting supplier favors
Accepting gifts and gratuities / Gift from potential suppliers are particularly questionable
Sharp practices
Willful use of misinformation / Exaggerating problems
Financial conflicts of interest
Direct financial interest in supplier company (self or close family relatives)
Personal conflicts of interest
Dealing with a company that....
Employs close relative(s)
Has been approached by buyer for employment
The buyer has approached for future employment
Supporting ethical behavior
Developing statement of ethics and Including In Procurement Policy and Procedure Manual
Top management commitment
Ethical training
Developing consistent behavior
Internal reporting of unethical behavior
Preventive measures