Supplier Selection
Training for Selecting the Right Supplier
by
Scott Mathusek
10 April 2010
Supplier Selection
1
What will be covered
•
•
•
•
•
Supplier Selection Defined
Brainstorming Exercise
Supplier Evaluation and Selection Process
Real World Example
Practice Exercise
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Supplier Selection
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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)
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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?
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Evaluation and Selection Process
1.
2.
3.
4.
Recognize the need for supplier selection
Identify key sourcing requirements
Determine sourcing strategy
Identify potential supply sources
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Evaluation and Selection Process
5. Limit suppliers
6. Determine method of supplier evaluation
and selection
7. Negotiate and select supplier
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Recognize Need for Supplier Selection
• Why are you looking for a supplier?
– End of contract
– Problems with current supplier
– Have new product
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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
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Carter’s 10 C’s of Supplier Selection
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•
•
•
•
Competency
Capacity
Consistency
Control of Process
Cost/Price
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•
•
•
•
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Commitment to quality
Cash/finances
Clean
Culture and relationships
Communication
Supplier Selection
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Determine Sourcing Strategy
• How many suppliers are you going to need?
– Single Source
– Multiple Source
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Identify Potential Supply Sources
• Where can you find your suppliers?
• Simple brainstorming activity will generate
a long list of possibilities
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Limit Suppliers in Pool
• Narrow down your choices
33%
40%
75%
100%
43%
36%
22%
25%
A
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B
57%
31%
18%
C
D
Supplier Selection
E
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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
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Negotiate and Select Supplier
• Perform negotiations with supplier
• Choose supplier and agree to terms
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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
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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
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Column1 Danny Ryan
Competency 40%
30%
Capacity
30%
30%
Consistency 20%
20%
Control of
10%
20%
Process
Competency
Capacity
Consistency
Control of Process
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A
77
85
95
90
Jane
25%
25%
25%
25%
B
90
85
86
95
Supplier Selection
Helen Mode Average
30%
30%
31%
20%
30%
26%
30%
20%
24%
20%
20%
C
76
85
95
90
19%
D
85
90
87
90
17
MODE
A
Competency 23.1
Capacity
25.5
Consistency
19
Control of Process 18
Total
85.6
AVERAGE
Competency
Capacity
Consistency
Control of Process
Total
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A
24.1
22.3
22.6
16.9
85.8
Supplier Selection
B
27
25.5
17.2
19
88.7
C
22.8
25.5
19
18
85.3
D
25.5
27
17.4
18
87.9
B
28.1
22.3
20.4
17.8
88.7
C
23.8
22.3
22.6
16.9
85.5
D
26.6
23.6
20.7
16.9
87.7
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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
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Readings list
All 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.
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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.
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