Chapter 13
Supplier Evaluation and Supplier
Relationships
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Key Questions Addressed in
Chapter 13
• How do we evaluate supplier
performance?
• How do we manage our supplier
relationships?
Example of a Categorical Supplier
Evaluation and Rating
Excellent:
Good:
Fair:
Poor:
a.
b.
c.
d.
e.
f.
Meets delivery dates without expediting.
Requested delivery dates are usually accepted.
Usually meets shipping dates without substantial follow-up.
Often is able to accept requested delivery dates.
Shipments sometimes late, substantial amount of follow-up required.
Shipments usually late, delivery promises seldom met, constant expediting
required.
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Weighted Point Evaluation
Systems
• Identify suppliers
– Important suppliers and/or critical goods and services
• Identify factors or criteria for evaluation
• Determine the importance of each factor
• Establish a system to rate each supplier on each
factor
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4
Customer Satisfaction and
Supplier Performance
Customer Satisfaction
Strategic
Needs
Traditional
Needs
Other Additional
Needs
Suppliers
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5
Buyer-Supplier Relationship:
Investment Versus Rewards
Obtained
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6
View of Buyer-Supplier
Relationships
•
•
•
•
•
•
•
Traditional
Lowest price
Specification-driven
Short-term, reacts to market
Trouble avoidance
Purchasing’s responsibility
Tactical
Little sharing of information
Partnership
 Total cost of ownership
 End-customer driven
 Long-term
 Opportunity maximization
 Cross-functional teams and top
management involvement
 Strategic
 Both supplier and buyer share
short- and long-term plans
 Shared risk and opportunity
 Standardization
 Joint ventures
 Share data
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7
The Deployment Path to
Partnership
1. Supplier Assessment
(Potential)
2. Supplier Improvements
3. Supplier Rationalization
4. Supplier Alignment
Supplier Partnership
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