Supplier Selection

{Build the Supply Base: supplier selection1. supplier evaluation- find potential suppliers, supplier certification (qualification, education, certificationISO 9000,14000). 2. Supplier development- integrate supplier in system, quality require, product specs, schedule/delivery, procurement polices, training, engineer/production help, information transfer procedures. 3. Negotiation- significant element, strategies: Cost based price model (open books to supplier, based on time and materials) Market based price model (based on published, auction, index prices: commodities) Competitive bidding (most common, no longterm relationship, request for rfq). 4. Contracting- share risks, benefits, incentives. Centralized purchasing, E procurement (online catalogs/exchanges, online auctions).} Logistics MGT- obtain efficient operations through integration of all material acquisition, movement, and storage activities. Frequent for outsourcing, allow competitive advantage from reduce costs and improve customer service. 1.Shipping systems: truck(flexible, moves majority manufactured goods) rail( large loads, containers) Airfreight( fast/flexible light loads, expensive) water( used for bulky low value cargo, oldest way of transportation) Pipelines( transport oil, gas,

It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)

Once you have figured out what type of supplier you need, it is time to source the right supplier within that category.

High number of suppliers, where some of them might be industry rivals makes managing supplier relationship critical

In this case, the company has demonstrated its powerful position in respect to the suppliers and workers, thus being able to create the conditions where the costs are quite low, and the revenues are generated. On the other hand, some researchers agree that such large retailers as Wal-Mart are able to maintain strong control over the suppliers and this may be considered as benefit for the suppliers (Bloom and Perry, 2001). It was revealed in the recent research that the suppliers that manage only small market share tend to demonstrate poor organisational performance in contrast to the situation when they have Wal-Mart as the primary retailer (Bloom and Perry, 2001). Consequently, this implies that Wal-Mart contributes to the strong supplier performance as well as their stable and strong position on the market, despite the financial pressures that Wal-Mart puts on the suppliers (Bloom and Perry, 2001). This way, Wal-Mart contributes not only to the generation of its own revenues but also to the stable ad ongoing supplier revenue generating process in an indirect way (Turner, Katz and Hurd, 2001). From the economic perspective, this activity contributes to the national economic performance of the domestic market, namely USA (Turner, Katz and Hurd, 2001). This implies that stability of the strength in the position of

There are a number of suppliers in the market for any product. So the procurement department should study the suppliers and make a list of potential suppliers in the market.

The purpose of this proposal is to improve or change the vendor selection process to purchase of goods and services from Third Party Company for production of company products. In the company, the vendor selection process is managed by a project manager with the help of purchasing department. This includes the following process:

The selection and evaluation of the suppliers, which worked in collaboration with Dell was a very vital factor. The selection of the suppliers was based on various factors, and these factors were consistently evaluated for the existing suppliers. Cost was the primary factor as Dell aimed at reducing the money involved in the supply chain.

In my interview with Elly Cipto, I learned a lot about what she does as a business owner of Computech International Technology, a small company that resells machinery parts. When discussing some of the challenges that she faces, she identified managing supplier relationships to be one of the biggest issues when working in international business. The issue with having to manage supplier relationships is the difficulty of finding suppliers that carry the correct parts, minimizing the cost of purchasing from the suppliers as a small business, and having to track costs with so many different suppliers. I chose to study this issue further because I think it is really interesting to try and understand the complexity of having to find different suppliers, maintain relationships with various people, and minimize costs. I also believe that as the main driver of the costs in Elly’s business, solving this issue could potentially have the most impact in increasing the profitability of her company.

purchasing. Complex procurement could involve finding long term partners – or even 'co-destiny ' suppliers that might fundamentally commit one organization to another. Obviously, procurement becomes a more vital element of value creation in economic activities, when (worldwide) fragmentation of production increases. In a global market procurement decisions are directly linked to sourcing strategies, so that procurement, in abroad sense, becomes an integral part of the general management of an internationally operating company or organization. The next section (section 2) discusses

Is driven by the points of interest the supplier has over the business. This can be given by the interesting of their items and administrations, the expense of supplier switch or the favourable circumstances this one has over a business. The less the quantity of suppliers of the same items the higher force they have over the organization.

Finally, procurement strategies and techniques for managing suppliers, selection of product category placement, product life cycle, trend analysis and enhancement of process efficiency will be explored. The combination of these elements will be used to form a procurement plan that will be recommended for adoption by the board.

Abstract Supplier selection, which is the first step of the activities in the product realization process starting from the purchasing of material till to the end of delivering the products, is evaluated as a critical factor for the companies desiring to be successful in nowadays competition

There is sometimes a significant amount of effort required to ensure that a supplier is appropriate for a particular category of goods or services. They should be able to supply goods and services that meet requirements of quality and fit for purpose. They should be reliable financially sound and not present a commercial or reputation risk and their prices should be competitive. It makes no sense to perform the relevant research on a supplier each time goods or services are

Any potential new suppliers should be screened using well-defined Key Performance Indicators. A similar approach should be taken for the spare parts that fit into the Critical quadrant. Long term contracts should be pursued in order to guarantee the supply and higher inventory levels should be maintained to ensure that operations are not disrupted.