The Supply Chain Notebook /supply-chain-notebook/ en valery@supplierevaluations.com Copyright 2010 2010-08-06T01:15:48+00:00 High temperatures in Russia complicate supply chains of food around the globe http://www.supplierevaluations.com/supply-chain-notebook/high-temperatures-in-russia-complicate-supply-chains-of-food 3bc3d4312e2df4079ba3b581877938f9 burning wheat fields in Russia and global food supply chainIs it global warming or just a bad year? Record temperatures in Russia this summer triggered Russian government’s response of stopping the export of wheat. As Mr. Putin put it in Russian – reserves don’t hurt ones pocket. As we live in the all connected world this decision caused significant waves in food supplies and futures trading. The decision immediately triggered a sharp rise in the value of futures for delivery of wheat in the world. At the Chicago Mercantile Exchange, the December futures on wheat rose by $ 0.6 - to $ 8.155 a bushel. The global prices on wheat rose 7.3%.

]]> 2010-08-06T02:15:48+00:00 How to Conduct a Supplier Visit http://www.supplierevaluations.com/supply-chain-notebook/how-to-conduct-a-supplier-visit 0f9b0a9500ae7f76e093aef6723afeb8 Robert MenardRobert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

The 20th century philosopher, Yogi Berra observed, “You can sometimes see a lot just by looking.”  Whether your task is an annual plant visit, a due diligence audit, or evaluation of a low cost country supplier, knowing the purpose, what to look for, and what to ask will produce better outcomes. 

]]> 2010-07-21T14:08:05+00:00 Logistics is key for international business success http://www.supplierevaluations.com/supply-chain-notebook/logistics-is-key-for-international-business-success 78be277a755986cbf60bf401f5250a87 When it comes to expanding your business internationally, logistics can make or break the entire operation. You can find a great supplier, negotiate great prices, goods quality and terms of payment . But if you can’t get the goods you need shipped to the customer as expected all your efforts can end up with nothing. 

It is a well known fact that carriers like Fedex, UPS, DHL are stronger in some markets and weaker in others. For instance DHL is stronger in certain countries of Eastern Europe while UPS providers better services in Western Europe and Fedex in the US. When considering international operations one has to consider options that depend on the local market conditions.
]]> 2010-07-08T22:56:12+00:00 How to Rate Supplier Performance http://www.supplierevaluations.com/supply-chain-notebook/how-to-rate-supplier-performance 4b23105ba6744c7c1f75dd50094a33a9 Robert MenardRobert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Purchasing Magazine regularly surveys its readers about supplier evaluation.  The numbers vary slightly by year but an average of three quarters business purchasing departments have a system (formal or informal) for rating supplier performance.  Would you be surprised to learn and Price is rated highest by fewer than 15%? 
 
Importance of Total Cost of Ownership
The four elements of cost are: Quality, Service, Delivery, and Price (QSDP)
TCO =the sum of the cost elements in QSDP, or TCO = Quality + Service + Delivery + Price
 
The importance of each element of QSDP will vary with the item purchased.  Maintenance Repair and Operations (MRO) parts offer a good example.  A buyer may be more concerned with having parts on hand at the supplier (Delivery) than with the Price.  Downtime costs caused by not having an inexpensive low value item available would far outweigh any Price advantage and thus is probably worth a higher price.  The buyer attains its objective of availability and lower TCO.  Economically, it may cost the supplier more to warehouse the customer’s parts and thereby justify a slightly higher price.  The supplier may understandably try to leverage that advantage into the highest supportable price.  It the price gets too high, the buyer will recalculate its TCO.  Meaningful supplier evaluations are based on objective measures using the principles of TCO.
 
To effectively evaluate a supplier’s performance, each of the QSDP elements should be further broken down into sub elements.  Here is one way we .could break down each of sub-element of QSDP.

 

]]> 2010-06-25T16:54:05+00:00 Avoid supplier fraud in China http://www.supplierevaluations.com/supply-chain-notebook/avoid-supplier-fraud-in-china 29c5ae43e68328954eca7e15821dd05e doing business in ChinaSo much has been written about China – some of it making the entire country sound so incredibly exciting and exotic and some of it making the area sound a little bit scary.  However, one thing can be said for sure – its culture is certainly very different from that of the one western buyers are familiar with.

The differences are not only cultural, they are also very present in any business dealings.  We have all read stories about the work ethic that seems to be embraced throughout most of the country and, it is certainly very different from the one that exists in most of North America.

]]> Blog 2010-06-18T16:20:09+00:00 Supplier selection process part 2 - how to select global supplier for your business http://www.supplierevaluations.com/supply-chain-notebook/supplier-selection-process-part-2 99251bb1bd27162ac6f02081699cd467 We continue our discussion about supplier selection process. This time we are going to review the criteria by which you should evaluate suppliers to select the right one. There are many potential criteria, we will focus on major ones:

Reliability, Financial Stability, Quality and Continuous Improvement, Competitive Pricing, On-time delivery, Customer Service and Communication,  Informative and functional Website, Approach to Partnership, Environmental Record, Corporate Social Responsibility. 

If you are a small business and do not have a formal methodology to select suppliers you need at least to be familiar with these criteria.

]]> 2010-06-10T19:26:13+00:00 Getting the Assistance You Deserve to Grow Your Business http://www.supplierevaluations.com/supply-chain-notebook/getting-the-assistance-you-deserve-to-grow-your-business ffcacb97e254e0765ab105ce7c956ed9 international tradeMost business owners, who truly know  the ins and outs of running a successful enterprise, are constantly working on developing plans – aimed at growing their business and, of course, by extension, their revenues and profit margins. Thanks to today’s fast paced world, it is impossible for any business to stand still – if they do, they die and, of course, looking towards the international markets is definitely the next step in global ownership. ]]> Blog 2010-06-09T22:51:40+00:00 Supplier selection process part 1 - - how to select global supplier for your business http://www.supplierevaluations.com/supply-chain-notebook/supplier-selection-process-part-1 2e0a9abc77f6c03d018bfe3247239cff international trade
If you are in the business of selecting suppliers, especially from developing countries, UK Customs Office did a lot of work to try and help you. Business Link is an impressive set of guides from export and import basics to specific supplier selection process. Many of the topics are UK specific and deal with UK taxes. But most are general purpose explanations on the topics of starting a business, finance and international trade.
 
As a part of the international trade discussions they provide guides that can be very helpful if you are new to importing goods from overseas. This blog post will focus on a part of supplier selection process. By no means is this a comprehensive guide but it provides a great foundation for someone who is new and has no much experience.
]]> Blog 2010-06-07T01:02:41+00:00 China Expo http://www.supplierevaluations.com/supply-chain-notebook/china-expo.html 9e7a23a5b17398176a2d2fcf73aa2281 shanghai expoIf you are considering broadening your business base to include China, you may want to attend the 2010 Shanghai Exposition, which opened May 1, 2010 and runs through to October 31, 2010. This conference is expected to attract over 70 million attendees, most of whom will consist of business leaders, as well as professionals from around the globe. This historical event will be the first registered World Exposition in a developing country, offering unprecedented access to an overall view of China’s future development and how its people will remain an integral part of a booming market and economy

]]> Blog 2010-05-15T14:55:14+00:00 Sourcing 101 part 3 - good companies gone bad? http://www.supplierevaluations.com/supply-chain-notebook/sourcing-101-part-3-good-companies-gone-bad c08f98bf0f13320747c123eaaba6202b Suppliers are one eager crowd to get noticed and get new buyers, right? In this world where new factories, trading companies and warehouses pop up every day, India, China, Bangladesh, Pakistan, Vietnam, Brazil – all present both great trading opportunities and sources of supplier fraud.  In this article we’ll talk about some basic due diligence you can do avoid getting scammed and list some tools you can use to do it.

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