To support this analysis it is necessary that the company firstly develop criteria for finding sources and secondly to classify purchases according to the sourcing strategy in place in the company.
Some of the immediate considerations for the company are things such as
- Is there an incumbent supplier and how are they performing,
- is there a single source or multiple suppliers
- what is the vendor size and capabilities
- where is the vendor located
- what kind of supplier relationship is desired
- what is the projected length of the contract
- what is the financial viability of the supplier
- are there any external considerations
There are several more areas that the company must explore with potential suppliers before making a final decision
- Quality Assurance - what processes are in place at the supplier and what is their current defect rate
- Operational Capability - what is the ability of the supplier to meet the company's needs, are they stretched to capacity or do they have the ability to add new capacity when required
- Logistics & Distribution - what is the suppliers ability to manage and deliver the good when and as required by the company
- Service - what is the suppliers current service level, has it increased or decreased from the previous tears
- Finances - what is the state of the suppliers finances, will they be around for the length of the contractOrganization / Management - what is the state of the supplier's operations / management groups, are they stable or in flux
- Labour Issues - Is the supplier's labour force stable, will there be any potential labour disruptions during the term of the contract
- Legal Issues - are there any pending legal issues facing the company during the term of the contract
By exploring all these areas in depth and performing a rigorous analysis a company will be able to successfully identify and select a supplier for their sourcing needs.
Ron_McAllister
0 comments:
Post a Comment