Entries tagged as supplier performanceHow to Rate Supplier Performance
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%? 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.
Comments: 0; Published: June 25, 2010; Permalink
Supplier Evaluation - key tool for supplier performance managementFinding qualified and reliable suppliers is a common challenge among the buying professionals. Yet when it comes to evaluating existing suppliers on an on-going basis only those with a lot of resources actually do it. Based on our own experience at supplierevaluations.com many buyers are reluctant to maintain data on supplier performance in any formal way. I wanted to discuss our approach in this article and get your opinion. Comments: 0; Published: February 22, 2010; Permalink
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supplier performance
The Magic Words in Supplier PerformanceAs an impetuous small child (and some say adult) I often demanded things from my mother. When I didn’t meet her requirements of polite speech, she would say “What are the magic words”? Comments: 0; Published: November 05, 2009; Permalink
Time to Look in the MirrorWho’s to blame if your supply chain falters? As an operations management professor, I am always asking my graduate students a lot about their own companies and sometimes I am disappointed with the answers I get. Comments: 0; Published: October 14, 2009; Permalink
Mind the Gap. A story of international trade in economic downtimesAnyone who rode the "tube" in London would certainly recognize this phrase. You have to mind the gap between the station platform and the metro wagon when entering or exiting the train in order to avoid falling in between. We can easily use the same phrase when it comes to sourcing, selecting suppliers and buying goods from overseas companies. Why? Because there is a huge gap of supplier performance data for companies overseas that no technology can bridge today. The problem is especially acute when we are talking about small and medium size companies that cannot afford spending countless dollars on supplier selection but are faced with the tough realities of dwindling customer demand and the push to reduce prices. Comments: 0; Published: October 11, 2009; Permalink
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buyers,mind the gap,small and medium sized businesses,supplier performance,supplier selection,suppliers
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