mod3

• Supplier selection


  The process by which firms identify, evaluate, and contract with suppliers
• Raw materials


  Anything used as inputs to production or manufacturing
• The supplier selection process deploys a tremendous amount of a business's financial resources. In return, businesses expect significant benefits from contracting with suppliers offering high value.
• Identifying potential suppliers


  1. Find a new supplier

  2. Supplier qualification screening

  3. Creating a supply base
• New supplier


  • Could have created a modern manufacturing technology or a simplified process that helps it to substantially reduce the cost of production compared to the prevailing production technology
  • May have a competitive cost advantage over existing suppliers, for example, too low labor rates or favorable import/export laws in their country of origin
  • The business can require additional suppliers specifically to boost competition, minimize the risk of supply interruption or achieve other market goals, such as diversity of suppliers
• Supplier qualification screening


  To avoid the terrible results of non-performance of the supplier, buyers typically take proactive steps to verify the supplier's qualifications before to the contract
• Supply base


  Suppliers that have met the criteria and apply for contract award are generally referred to as "pre-qualified" suppliers. The use of a supply base not only eliminates the expense of certification screening but also allows for the production of uniform contracts, terms, and conditions for pre-qualified suppliers, thus streamlining the logistical processes involved in contracting.
• Information request to suppliers

  • Request for Information (RFI)
  • Request for Proposal (RFP)
  • Request for Quote (Quote Request)
• Contract terms


  The information obtained by the suppliers via the requests must eventually be converted into formal contractual terms before contracting can take place. A contract with a supplier sets out what the supplier should do and how the purchaser will pay for them.
• Negotiation process


  In the negotiations, the buyer tries to establish favorable terms on the part of the suppliers, and the suppliers often aim to establish favorable terms on the part of the buyer.
• Identifying Potential Suppliers


  1. Finding a new supplier

  2. Information request to suppliers

  3. Monitor the supplier performance

  4. Contract terms

  5. Supplier evaluation and contract award

  6. Negotiation process
• Request for Information (RFI)


  Ask the suppliers what products and services they might offer
• Request for Proposal (RFP)


  Information on how they would meet the performance expectations of the customer and the price they would be willing to pay
• Request for Quote (Quote Request)


  Issued when the buyer can develop a statement of work that states the exact specifications of the goods or services needed
• Contract terms


  The information obtained by the suppliers via the requests must eventually be converted into formal contractual terms before contracting can take place
• Negotiation process


  The buyer tries to establish favorable terms on the part of the suppliers, and the suppliers often aim to establish favorable terms on the part of the buyer
• Supplier evaluation and contract award

  1. Evaluate the nature of the programs provided in the proposal and consider whether they satisfy your criteria

  2. Decide on the value of each criterion and rate all submissions against it for an objective assessment process

  3. Identify what the term of the agreement or contract with each potential supplier is to ensure that you are not caught up in a situation that could hurt your business

  4. Describes how the customer reviews the suppliers, then decides the contract winner(s)
• Monitor the supplier performance


  Conducts follow-up monitoring and regular performance reviews to inform future acquisitions of suppliers
• Purchasing (or procurement)


  The method of purchasing the goods and resources that are to be used for production
• Selecting a supplier


  • Can the vendor supply the needed quantity of materials at a reasonable price?
  • Is the quality good?
  • Is the vendor reliable (will materials be delivered on time)?
  • Does the vendor have a favorable reputation?
  • Is the company easy to work with?
• 1. procurement


  The method of purchasing and selling of products or services by electronic means via the Internet
• Inventory control


  The process of striking the balance of running out of materials that are needed in production
• Just-in-Time production


  The manufacturer arranges for materials to enter the manufacturing process just in time to arrive at production facilities
• Material Requirements Planning


  A computerized program to measure the number of materials required for production and to decide when to order or produce them
• Work scheduling


  Managers need to know where the materials are stored and are going in the manufacturing process at every stage