OM337_Session 8_09202011 (1)

OM337_Session 8_09202011 (1) - Procurement and Supplier...

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Click to enter Subtitle information More Subtitle info Procurement and Supplier Management Session 11 Chapter 7 30 September, 2009
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Chapter Overview § Supplier evaluation and selection process § Key supplier evaluation criteria § Developing a supplier evaluation and selection survey § Critical supplier selection issues § Reducing supplier evaluation and selection cycle time 22
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Supplier Selection and Evaluation {0563EF47-17BA-4E08-97B7-27A2FA183 87} Recognize the need for supplier selection {6041BDEC-C6C4-41B2-BAF0-3A83E9CAC2F0} Identify key sourcing requirements {08DF0B90-0105-49BA-9864-EAE67ED53D38} Determine sourcing strategy {AD74B1BA-A63C-4CB9-AE1 -E146A8A06C63} ify potential supply sources {BE0DF1CF-F5 6-456B-9EFA-2F17F525A8DB} Limit suppliers in selection pool {565B4C04-2 4E-43C -A9B3-5697B9E93A 9} Determine method of supplier evaluation an {52E7E18A-274 -4580-A204-D45EA D96 4B} Select supplier and reach 33
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Determine Sourcing Strategy § Single vs. multiple sourcing § Short-term vs. long-term contracts § Design support vs. operational support § Full-service vs. non-full-service suppliers § Domestic vs. foreign-based suppliers § Collaboration vs. arm’s length relationship 44
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Information Search Requirements 55 High Capability of Suppliers Low Capability of Suppliers High Strategic Importance to Buyer Minor to Moderate Information Search Major Information Search Low Strategic Importance to Buyer Minor Information Search Minor to Moderate Information Search
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Method of Evaluation and Selection § Evaluation from supplier-provided info § Supplier visits § What do you look for? § Use of preferred suppliers § External or third-party information § Ideas? 66
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Key Suppliers Evaluation Criteria § Price, quality, and delivery § Management capability § Employees capabilities § Cost structure § Total quality performance, systems, and philosophy § Process and technological capability § Environmental regulation compliance § Financial stability § Production scheduling and control systems § E-commerce capability § Supplier’s sourcing strategies, policies, and techniques § Longer-term relationship potential 77
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Interpreting Financial Ratios Liquidity Ratios Interpretation Current ratio = Current assets / Current liabilities Should be > 1.0, but look at industry averages Quick ratio = (Cash + Receivables) / Current liabilities At least 0.8 if supplier sells on credit Low = cash flow problems Activity Ratios Interpretation (compare with industry average) Inventory turnover = COGS / Inventory low = slow inventory or possible cash flow problems Fixed asset turnover = Sales / Fixed assets Too low = supplier may be inefficient
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This note was uploaded on 10/04/2011 for the course OM 337.3 taught by Professor Hasler during the Fall '11 term at University of Texas.

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OM337_Session 8_09202011 (1) - Procurement and Supplier...

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