Strategic Supply Chain Management: Supplier Selection - Essay Example

Comments (0) Cite this document
SUPPLY CHAIN MANAGEMENT THE STAGES OF SUPPLIER SELECTION AND THE COMPARISON OF PROCUREMENT IN THE PUBLIC & PRIVATE SECTORS INTRODUCTION Organisations all over the world have the need to purchase various assets and inputs to enable them render their primary service to society…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.8% of users find it useful
Strategic Supply Chain Management: Supplier Selection
Read TextPreview

Extract of sample "Strategic Supply Chain Management: Supplier Selection"

Download file to see previous pages Thus, the management of procurement is vital. This paper sets out to critically examine the four stages of supplier selection. This will look at the various decisions, criteria, approaches, and challenges at each stage of the supplier selection process. It then goes further to examine and evaluate the differences and similarities in supplier selection in private sector and the public sector. STAGES IN SUPPLIER SELECTION The main things organisations analyse and examine critically in supplier selection are quality, reliability, price and other performance factors1. This is done by using structured systems to evaluate the purchasing need of the organisation exhaustively and also identify the capabilities of an ideal supplier. When this is done, organisations seek potential suppliers and invite them to bid for the procurement. When the bids are obtained, the business critically examines each supplier bid against set standards and also against other potential suppliers. This way, an organisation can only acquire the best of materials and services from the best suppliers. The process is summed up scientifically in four steps: 1. Initial Supplier Qualification 2. Agree Measurement Criteria 3. Obtain Relevant Information 4. Make Selection INITIAL SUPPLIER QUALIFICATION This stage is concerned with the identification of the importance of the item being procured to the organisation and the details of the ideal supplier to procure it from. This is a very rudimentary but important stage in supply chain management because it matches the resources available for the purchase with the strategy of the organisation and then carves out an ideal supplier. According to Kraljic, a business will identify the profit impact of the purchase and the supply risk impact2. The profit impact analysis is where a company matches its purchase with its overall strategy and profitability targets. This is done by comparing the purchase with the internal factors in the business. This way, the business will be able to identify and document exactly what it needs and where to look for it. Supply risk is about main factors of the supply markets that affect the purchase at hand. Supply risk is assessed by examining the prevailing conditions of the markets in relation to supplier scarcity, pace of technology and/or material substitution, entry barriers, logistics cost or complexity, monopoly and oligopoly in the markets. Supply risk analysis is therefore vital to identify the position of the business in relation to where it stands on the market for a given procurement transaction in relation to the buyer-seller power situation. When this is completed, a business can get a good idea of the kind of supplier it would want to contract for the purchase at hand and plan a strategy. These broad standards are set by identifying the minimum manufacturing capability, vendor assessments and financial viability that an ideal supplier must possess. In practice, most businesses have procurement committees and teams that take the purchasing and supply needs of the various units of the organisation for the next year. They critically analyse the profit impact and supply risk and get the supplier specification based on the resources available, importance of the purchase, and the kind of supplier to source from. The challenge at this stage is that there is a lot of work to be done in analysing each purchase at every point in time. This comes with administrative ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Strategic Supply Chain Management: Supplier Selection Essay”, n.d.)
Retrieved from
(Strategic Supply Chain Management: Supplier Selection Essay)
“Strategic Supply Chain Management: Supplier Selection Essay”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Strategic Supply Chain Management: Supplier Selection

Strategic supply chain & logistics management

...? Strategic supply chain & logistics management 302 School of Information Systems Curtin of Technology Group Assignment Group Report Word Limit: 6000 words Due: 2012-05-18 at 16:59 Insert name here Table of contents Title Page No. Contents Page …………………………………………………….. 2 Executive Summary ………………………………………………. 3 A. Prada Supply Chain …………………………………………… 4 Introduction ……………………………………………………. 4 Model: Liz Claiborne ………………………………………….. 4 Innovation in Firms ……………………………………………. 7 Outsourcing ……………………………………………………. 7 How Prada can improve supply chain ………………………… 11 B. A New Company with Li & Fung …………………………….. 11...
20 Pages(5000 words)Essay

Strategic supply chain & logistics management

... strategic part of marketing. Products and services must be geared towards customer focus, and customer satisfaction is a goal in a value added supply chain. Supply chain management excellence is crucial to customer satisfaction; consequently, customer satisfaction is critical to customer loyalty, and loyalty critical to profitability. In order to address the problem of customer loyalty, firms apply product and service innovations. Supply chain learning should be a part of the firms’ strategies to address customer satisfaction and loyalty. This is also the main objective of market orientation – customer satisfaction through superior performance of products and services. Companies attain competitive edge through constant innovation... of...
8 Pages(2000 words)Essay

Strategic Supply Chain Management: Risk management

...or the variation in the exchange rates. Moreover, a company will be more affected and prone to procurement risks if it uses only one supplier. As an example, during the economic crisis, the value of the US currency decreased, as a result of which the costs to many US based companies drove up. Setting up financial hedges, balancing the costs by selecting at least one global location for product selling, can counter the risks. Also, maintaining several suppliers at a time, or holding inventory, making short term contracts with suppliers may help to avoid risks. 6. Inventory Risk – excess inventories have long been the focus point of supply...
10 Pages(2500 words)Essay

Supply Chain Strategic Management

... model in its logistics activities to enhance effective flow of goods or end products. It is important for the organization to make effective relationship with the existing suppliers and motivate these suppliers to follow the corporate values and business culture of Tesco. This process will help the upstream strategic management process to source the raw materials and manufacture products accordingly. In addition to this, the organization should focus on own distribution network activities. Integration of advanced technology, sustainability and strong procurement process in the product delivering process to the consumption point will help the organization to enhance effective downstream supply chain model. Effective integration... ...
12 Pages(3000 words)Research Paper

Strategic Supply Chain Management

...administrative costs. Reducing the total and moving towards single-sourcing can produce such benefits as, lower administration costs, more time to manage each supplier, an improvement in the relationship between you and the supplier more responsive problem solving, resulting from a greater understanding of difficulties and requirements and better communication. 5. Tendency to overlook core functions: Sometimes, in the supply chain integration, the principal company gets so involved that it does not have the necessary time and resources to concentrate on its core functions or for that matter on Research & Development. This tendency has been appropriately...
10 Pages(2500 words)Essay

Strategic Supply Chain Management

...Strategic Supply Chain Management For a company of MultiChem Ltd’s stature, it is very important that it understands what it basically wants from themarkets that it operates within. The top management must find out the exact reasons for the business to be in operation and then discern the fact that whether or not MultiChem Ltd has lived up to the objectives, mission and vision statements that were drafted at the time of launching this laboratory. Ever since it kicked off its working basis in the year 1955, MultiChem Ltd has only grown – grown to such magnanimous proportions that it seems inadequate at times to comprehend the exact manner of its basis. This has put nearly everyone’s job at a risk. No one knows for certainty how... that the...
10 Pages(2500 words)Essay

Strategic Supply Chain Managemnt

...Strategic Supply Chain Management of Mitchells and Butlers Goose Pub Introduction to Supply Chain management The supply chain of an organization hasvery significant role in understanding the needs which supports the survival of the organizations and provide them with a purpose to thrive for. Each and very business organization has its supply chain irrespective of their type of industry in which they operate. In order to have effective and efficient supply chain organizations build their supply chain considering the business strategy and the purpose of the organization (Hugos, 2006). Many organizations offer multiple products to their customers and they have... ...
13 Pages(3250 words)Essay

Strategic Supply Chain Managemnt

...Strategic Supply Chain Management Introduction The basic purpose of any production process is to add value to the raw materials that are introduced in the process by utilizing the available labour and capital in the most efficient manner possible. It is pretty obvious that the production process will most certainly be geared towards producing those items that are in greater demand as any business entity tries to shorten the working capital cycle as much as possible so as to generate maximum amount of profit in the shortest possible time frame. But there is one other element that affects the overall profitability of any organisation, and that is the volume of capital...
13 Pages(3250 words)Essay

Strategic Supply Chain Management (REPORT)

...and can only sustain it if it reduces it costs. The more costs it reduces the more profit it will gain. The company should also adopt thorough forecasting analysis not only for the customers but also for the suppliers. Since the bargaining power of suppliers is extremely high, they have the power to affect the profitability of the company negatively. It is important to have an insight about what the supplier is going to do in the near future. This would help the company to prepare for any unforeseen challenge related to the supplier. The partnering approach within the supply chain management should be integrative and...
8 Pages(2000 words)Essay

Strategic Supply Chain Management encouraging car users in Britain to exchange their old car for new ones. British government is providing many incentives to the consumers if they take part in this scheme. Conclusions Strategic supply chain management or SSCM came into prominence only in recent times even though SCM was in place for a long time. The core principle or objective of SSCM is to reduce the production cost and transportation cost as much as possible. In car making industry this objective is met by car makers by establishing car assembling plants in cheap labour oriented countries. While selecting the location of the car assembling units, car makers consider the...
8 Pages(2000 words)Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Strategic Supply Chain Management: Supplier Selection for FREE!

Contact Us