Supplier Evaluation and Selection

Sourcing and Supply Chain Management

Ref.: Handfiel, Monczka, Giunipero, Patterson

Presented byAnish Gambhir

Highlights1. Objective2. Importance of Supplier Evaluation and Selection3. Involvement4. Supplier Evaluation and Selection Process5. Performance Categories6. Tool or instrument for use during suppler evaluation7. Developing Supplier Evaluation and Selection Survey

• Example

Objective

Reduce Purchase Risk and Maximize overall value to the Purchaser

Importance of Supplier Evaluation and Selection

• For sound selection decision• Long term agreements• Willingness of switching is diminished

Involvement

Cross Functional Personnel

Purchase, Project Management, Engineering, Finance, Quality

ProcessRecognize the need of Supplier Selection

Identify the sourcing requirements

Determine Sourcing Strategy

Identify Potential supply Sources

Limit Suppliers in Selection Pool

Determine method of supplier Evaluation and Selection

Select Supplier and Reach Agreement

Performance Categories

Others•Management and Employee Capability•Cost Structure•Process and Technological capability•Sustainability and Environmental Compliance•Financial stability•E-Commerce capability•Production scheduling and Control Systems

Cost Price

QualityDelivery

Tool or instrument for use during suppler evaluation

1. Map the current evaluation and selection supplier2. Integrate with internal Customers3. Data Warehouse with supplier information4. Third Party Support5. New organizational Design features6. Preferred Supplier List• Example

Developing Supplier Evaluation and Selection Survey

Finer Selection1.Identify supplier evaluation categories2.Assign weight to each evaluation category3.Identify and weigh subcategories4.Define scoring system for categories and subcategories5.Evaluate supplier directly6.Review evaluation results and make selection decision7.Review and improve supplier performance continuously

Example

Vendor Assesment Report

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