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These are basic definitions straight from the dictionary taken from the Web: www.businessdictionary.com and www.westburndictionary.com
Example of an Organisation and its suppliers
This is simply a brainstorming exercise designed to get a group of people thinking together and sharing ideas with one another. Why is supplier selection so important to your organization? This question will get people thinking deeper about the specific answer to their organization. Answers could be lower costs, increased quality, etc. What can result in your company from having the incorrect supplier? This question is basically to get the opposite answers as the first. It will get the group to see the stark contrast and importance of it. What is important to you when finding a supplier? This question will get them thinking about their views of supplier selection before hearing our views. They will then be able to compare those thoughts during the training.
How to go about it when making a selection.
Reliable delivery methods Quality control methods and practices Technical abilities and leadership Ability to provide niche or unique product offering and/or design concept Financial stability & credit strength Compatibility with existing products Adequate distribution/warehousing facilities and resources Spare parts availability Warranty, insurance, and bonding provisions Proven performance and experience (quality references in and out of casino industry preferred) Sales/service support resources available during prime hours of a casino business
Do they have the proper management, use correct auditing procedures, have the proper qualifications? Look at what other customers think. How happy are they with the supplier? Have they encountered any problems? And why have former customers changed supplier?
So, how quickly will it be able to respond to these, and to other market and supply fluctuations? Look at all of the supplier's resources, too. (These resources include staff, equipment, storage, and available materials.) One thing to consider is how much your contract comprises the supplier’s annual turnover. If it is high enough that they will have problems if you make a late payment, they may not have enough capacity for you. You don’t want their company to rely on you to keep them in business.
How will this supplier ensure that it consistently provides high quality goods or services? No one can be perfect all of the time. However, the supplier should have processes or procedures in place to ensure consistency. Ask this supplier about its approach, and get a demonstration and a test product, if possible.
You need to be certain the supplier can be in control of their own processes. There may be a time when you require a change in the product they send to you. Will they be able to cope with that change to continue giving the same consistent service? Do they monitor their programs and systems to be on top of any possible failures? What poke yokes do they use?
Seek Quotations and Prize List This does not just mean getting a low price on products you purchase. It encompasses all possible costs. What will be the cost of maintenance and repair costs? If you are buying equipment for a manufacturing plant are you going to be able to easily match the new parts with the old machines? How much will it cost to fix it if not? Does the price you pay seem in line with your expectations? If not, why not? Have you reached a common understanding with your supplier about the scope of the project? Is there quality worse than you expect? Maybe it’s better than you need.
Commitment to Quality: Remember that a company that is ISO certified doesn’t necessarily have great quality measures. It basically means the follow the same process and should be consistent in their quality. This does not mean they will meet YOUR quality standards. Research their quality standards and compare them to yours. Ask to read their manuals. Look at their history of recalls and returns. DON’T BE SHY about this.
Cash/Finances: Make sure you are dealing with a company that has the money to stick around. Read their financial reports. Look deeper than the numbers. Remember that any annual statement on the financial documents have to be honest, but they can be making the situation seem better by articulating the words used.
Clean: this refers to this supplier's commitment to sustainability, and its adherence to environmental laws and best practices. What is it doing to lighten its environmental footprint? Ask to see evidence of any green accolades or credentials that it's earned. Also, does this supplier treat its people – and the people around it – well; and does it have a reputation for doing business ethically?
Clean means up to the standard expected by the law or written regulations about that industry should be adhered to
Does the supplier want to build a collaborative relationship with you? Do you even want that from them? What kind of relationship are you looking for? Does it match what they do?
Communication is Key to successful relationships
Use the Carter’s Model to be successfull
Buyers, Suppliers and organisations
Quotation, price list, pro-forma invoice, invoice, receipt, sales returns. No fly-by-night companies. No briefcase companies.
They are placed in an enclosed box and kept under security lock until day of short-listing They pay a percentage value to the tender called Security deposit to the company It is usual issued for big projects i.e. Building projects, furnishing projects e.t.c
AVOID Receiving tips, bribes, inflicting prizes, buying your own staff separately using the Organisation’s money. Avoid conflicts of interest. IT IS A GOOD THING TO KNOW THE CODES OF CONDUCT FOR YOUR PROFESSION Knowing the ‘Codes of Conduct’ Being a Steward, Upholding loyalty and respect, integrity, impartiality and fairness, transparency, confidentiality ETHICAL RISKS & ACTIONS TO MANAGE THEM Conflict of interest Fraud Corruption Coercion Collusion Ethics have been included in these slides as bonus yet it is a requirement for professionals, its because Ray Carter didn’t include then on the Cs clearly. Just in case you say there are not included.
Siyabonga Tatenda, Taboka
Consumer Behaviour: Supplier Evaluation Selection
• Discuss How Organisational Buyers Evaluate Potential
Supplier Evaluation Selection
Sinqobile Ndebele L013-0961R
Sibonginkosi Ndhlovu L013- 1354J Supplier Selection
12 March 2017
• Supplier, Buyer Supplier Evaluation Definition.
• Brainstorming Exercise.
• Approaches to supplier evaluation.
• Importance of Suppler Evaluation.
• Mitigate Risk.
• Supplier Evaluation Selection Process and Criteria.
• The Procurement Cycle.
• Carter’s 10 C’s of Supplier Selection.
• Real World Example.
• Bonus – Ethics.
Supplier: “External entity that supplies relatively
common, off the shelf, or standard goods or
services” (Business Dictionary)
A supplier is a business or individual that
supplies one’s business with products or services
that one uses in his or her business. For example
for chicken inn, some of its suppliers could be a
broiler company(supplying with chicken, the
electricity company supplies with electricity.
Broiler as a Supplier
Chicken Inn Logo Chicken Inn Suppliers
Supplier Selection Definition
• Supplier Selection: “The stage in the buying process when
the intending buyer chooses the preferred supplier or
suppliers from those qualified as suitable.” (Westburn
• Sherry Gordon (2008) states that supplier evaluation is
also a process applied to current suppliers in order to
measure, monitor their performance for the purposes of
reducing costs, mitigating risk and driving continuous
improvement. Thus one can then argue that supplier
evaluation is a comprehensive model used to minimize
the risk associated with quality and delivery
• Why is supplier selection so important to
• What can result to your company by having
the incorrect supplier?
• What is important to you when finding a
APPROACHES TO SUPPLIER EVALUATION
• CONFERENCE ROOMS
• SITE VISITS
• USING THIRD PARTY EVALUATORS
Face to face discussion can help clarify
specifications and determine whether a
supplier can meet the demands of a
Many suppliers look good on paper,
but visiting a site can help
determine whether there are
Trained third party organisations are
often hired to evaluate and audit
suppliers Resource intensive
• Requires trained personnel
• Involves surveys
Importance of Supplier Evaluation in
Increase Performance Visibility
When companies do not know the facts about their
suppliers, supplier management tend to be based on
guesses. evaluating suppliers helps to improve
performance and meet the goals of the organisation thus
increasing the performance visibility.
• Insight into supplier performance and business
practices helps to reduce business risks. Those
risks can be financial or operational
Align Customer & Supplier
• Suppliers should run their business in alignment
with their customers, they can share same
business ethic and expect similar standards of
excellence as well as showing commitment to
Ray Carter’s Key to
Ray Carter director
of DPSS Consultants
first outlined his
seven Cs of supplier
evaluation in a 1995
later added new Cs
to the model.
Carter’s 10 C’s of Supplier Selection
• Control of Process
• Commitment to
• Culture & Relationships
• Looking at how competent the
supplier is, in what they do?
• Do they possess the needed skills i.e.
Building Project, Accounting and
• Supplier's capabilities measured
against your needs
• The supplier needs to have enough
capacity to handle your firm's
• Does it have the resources to meet
your needs, particularly when
commitments to other clients are
• Expect the supplier to deliver exactly
what you want every time. If it is not
exactly what you want, it should be
exactly what you require.
• The supplier needs to be consistent
with timing and quality issues.
Control of Process
• Query how much control this supplier has
over its policies, processes, procedures, and
• How will it ensure that it delivers consistently
and reliably, particularly if it relies on scarce
resources, and particularly if these are
controlled by another organization?
• It is vital to look at the cost of the product that this
• How does product compare with the other firms
that you're considering?
• Most people consider cost to be a key factor when
choosing a supplier. However, cost is in the middle
of the 10 Cs list for a reason:
• Other factors, such as a commitment to quality and
financial health, can potentially affect your business
much more than cost alone, particularly if you will
be relying on the supplier on an on-going basis.
‘’Quality means doing it right even if
nobody is looking’’ Henry Ford
Commitment to Quality
• The supplier needs to provide evidence that it's
committed to high quality standards. Where
appropriate, look for quality initiatives within the
organization, such as ISO 9001, SAZ and Six Sigma .
• The supplier also needs to show that it is committed
to your Company, as a customer, for the duration of
the time that you expect to work together. (This is
particularly important if you're planning a long-term
relationship with the supplier.)
• You'll need evidence of its on-going commitment to
delivering to your requirements, whatever the needs
of its other customers.
Look at what happened at Nandos building in
Bulawayo btwn 7th & 8th Jason Moyo
This has led to speculations on the quality of
workmanship as well as health and safety
To all Stakeholders
Whatsapp photo chats 25
Read the Supplier’s financial reports,
look deeper than the numbers.
Your supplier should be in good
financial health. Cash-positive firms are
in a much better position to weather
the ups and downs of any uncertain
Does this supplier have plenty of cash
at hand, or is it overextended
financially? And what information can
the supplier offer to demonstrate its
on-going financial strength?
• Make sure that their buildings and products are clean
• By clean; Carter means that you want to make sure that
the products the supplier uses are not controversial,
dangerous, or tampered with in any way.
• For example, if you are Nike and you are having a
company make your shoes you will want to make sure
you are not using sweat shops somewhere along the
supply chain. If you are a toy company and you buy your
toys from China you will want to make sure that the toys
are not painted with lead paint.
Comparison or two Suppliers in the
Dirty Environment Clean and up to Standard
Culture and Relationships
• The best business relationships are based on
closely matching workplace core values . This
is why looking at the supplier's business
culture is important. For example, what if
your organization's most important value is
quality, and your main supplier cares more
about meeting deadlines? This mismatch
could mean that it's willing to cut corners in a
way that could prove to be unacceptable to
• This goes a lot with culture and relationships.
• It actually goes well with the other 9 C’s.
• Does the supplier have the technology to stay
in communication with you?
• How does the supplier communicate?
• How often does the supplier communicate?
• Are they willing to give proprietary
In short we are saying
If you use Ray Carter’s Key to Successful
Evaluation you will never go wrong
Real Life Examples
• How companies or organisations
deal when buying
• Pertaining to big projects or day
to day buying by companies and
• For Day to day Orders i.e. Stationary & Cleaning
material, in a formal organisation the buyer is
required to request from three (3) reputable
• A quotation from the supplier, a price list,
samples of products for testing if there are there.
• After choosing the one appropriate supplier
follows all types of trading letters.
Where it Involves a Tender/Bids
• An invitation to tender must be published
depending on weather its open or advertised to
all vendors or contracts, then there are
restricted tenders to selected prequalified
vendors or contractors
• Notice and Invite is at least 30-35 day
calendar, no longer than 12 months. 15 calendar
days if a Prior Information Notice (PIN).
• A tender must be enclosed in a double envelope
• Shortlisting for suitable vendors starts after the
• Their sales pitch.
• Our Bonus in Conclusion Outside Carter 10Cs is about:
• ETHICS: What is right and good or wrong and bad in any
given situation” (Northhouse P.G. (2013).
• Ethics – are the moral principles governing or
influencing conduct. In Zimbabwe there is the Chartered
Institute of Procurement and Supply (CIPS) code of
conduct for reference.
• It involves principles such as fairness, trust integrity,
honesty, cultural respect, and transparency – upholding
the Organisation’s standards and policies and all
relevant legislation. Buyers and Suppliers have to know
their code of conduct and practice it (implement it).