The Process of Selecting Suppliers That Uphold Cooperate Social Responsibility - Essay Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxx Course : xxxxxxxxxxx Title : Report on supply chain management Tutor : xxxxxxxxxxx 2010 Report on supply chain management Introduction This report seeks to give an illustration of how I would go about selecting suppliers who meet the criteria of cost, quality, delivery and flexibility. The report will also depict the process of selecting suppliers that uphold cooperate social responsibility. Moreover, this report will illustrate how as the purchasing manager of Primark, I would work with suppliers to ensure that all the products that are sold by this company are competitively priced, delivered according to the standards and that they meet the Primark’s quality criteria. The process of selecting suppliers Selecting an effective net of suppliers plays an integral role to the success of a company, therefore, supplier selection is a vital aspect in the contemporary competitive business environment. When making decisions revolving around supplier selection there are two crucial issues that should be put into account. These issues include the criteria and the methods that should be used to select the right suppliers. In most cases the review criteria in suppliers selections includes, the cost, quality, delivery, flexibility and the cooperate social responsibility upheld by a particular supplier. In regards to cost as the criterion of determining the selection of supplier the aspect of net price is pertinent. Basically, the net price is the price including the freights charges and discounts by the vendors. In the supply selection procedures it is not enough to include the net price only. Other qualitative factors such as quality and service cost should as well be put into account. When it comes to quality, suppliers should have the aptitude of consistently meeting quality specifications such as quality staff, experimentation and inspection. The delivery criterion requires suppliers to be competent in meet the set delivery schedules. These schedules may extend to cycle time, shipment quality, freight quality and lead time. As far as the criterion of design and development is concerned, suppliers should be in a position to initiate design capability, product improvement and should be committed towards the continuous improvement of products that they supply. In reference to the flexibility criterion of selecting suppliers, it is imperative to consider the ways in which suppliers show responsiveness towards the needs of the customers. Suppliers should be in s position to respond appropriately to the existing market needs of the customers, changing order, unexpected demands and quota flexibility among many other factors. In addition, the relationship between the suppliers and the buying firms should be put into account in the supplier selection process. By investigating the current and past relationships provides elaborate framework of evaluation and supplier selection is established. Eligible suppliers should as well uphold cooperate social responsibility. In order for them to meet this criterion they should practice responsible business and show sustainable cooperate responsibility. Ideally, in order for the supplier to be selected as the company’s representative they should depict that they adhere to the law, ethical standards and promote the interest of the general public by promoting community development and growth. Approaches of supplier selection The selection of strategic supplier partners poses a great challenge to purchasing managers. As established before in this report strategic suppliers should be in a position to furnish the company with the needed products in an effective and timely manner. There are several approaches used in supplier selection, key among these approaches include, the Analytical Hierarchy Process (AHP), the mathematical programming model and the statistical approach among many others. The Analytical Hierarchy Process of supplier selection is a convenient tool that is widely used in criteria decision making as far as the supplier selection is concerned. This method of suppliers selection will allow the company to establish their own criteria of preferences for the purpose of selections. The AHP technique of supplier’s selection makes the selection process transparent and discloses the merits of the alternative solutions in a situation that is requires multi criteria decision making. This method is essentially subjective thus the priority elements can be acquired from the decision maker in the company through a questionnaire method or direct questioning (Kauffman, et al 2006). The AHP approach is relatively easy to understand and apply since it uses hierarchical relationships that are one- way among several factors. For instance, when selecting suppliers the decision makers in the company may classify factors into quality, cost and flexibility. In the course of the selection process suppliers could be rated separately according to each of these factors thereafter, an overall score is aggregate d and arrived at. In addition, Analytical Hierarchy Process of supplier selection can incorporate other interrelationship factors in to the decision making criteria or model. Basically, this model of supplier selection is more realistic and effective (Cousins & Lamming, et al 2008). The mathematical programming model of supplier selection incorporates an optimization method that maximizes the objective function between supplier and buyer constraints. The objective function in this model could involve a single criterion also known as the classical optimization model or multiple criteria also known as the multi-objective programming. The multi-objective model can be used in supplier selection to evaluate purchase costs, late deliveries and rejected units. This model can be used to solve cost minimizing problems in supplier selection using price breaks. Moreover, this model can be used to examine the reduction complexity of a particular product by design. The model takes into account the costs of logistics, quality, service and the net price among many other factors (Handfield & Robert 2008). The Data Envelop Analysis unit of this model analyses the comparative efficiencies of the decision making process in supplier selection. The multiple inputs and outputs are compared using this unit, this method is non-parametric thus it allows the valuation of efficiency without the specifications of the kind of production function or weight in regards to the chosen inputs and outputs. Given the fact that the mathematical programming model of supplier selection is geared towards working with larger numbers of constraints it can therefore be used in multiple supplier selection (Harland & Eugene 2008). The statistical approach of supplier selection incorporates discrete selection analysis to assess the choice of suppliers. . Path analysis and confirmatory factor analysis can as well be employed to evaluate the empirical relationships between the supplier involvement, selection criteria, customer satisfaction and the overall form performance. Working with suppliers The initial step of working with suppliers requires that the suppliers have an inherent understanding on the Primark quality standards and requirements. It will be essential to present a tender document with an incisive project and product definition. Prior to the project the supplier should produce the agreed technical specifications. In the course of this process it is essential to work collaboratively with the supplier so as to come up with the consensus on the agreed terms. While working with suppliers it is essential to exercise effective project management techniques (Owens 1996). As the purchasing manager of Primark, my main goal when working with suppliers will be to ensure that the products that are sold by Primark meet the set quality criteria and meet the needs of the customers. In order to actualize this goal will need to establish a framework that promotes effective practices in the supply chain environment. This frame work will incorporate effective communication channels since communication is imperative in ensuring the supply chain between the Primark Company and the net of suppliers is sustainable. Through the established communication channels suppliers can get customer feedback thus enabling them to provide sustainable products that meet the set quality criteria of the company and the needs of the customers (Baily & Jones 2005). In order to actualize the goal of working with suppliers to ensure that the products that are sold by Primark meet the set quality criteria and meet the needs of the customers, as the purchasing manager, I would develop retail policies that give clear standards, procedures and recommendations for sustainability performance. These would include standards and specifications on the cost, quality, delivery, flexibility and cooperate social responsibility. Furthermore, I would implement action plans for the sustainability of suppliers that are based on the kind of product, supplier and the overall performance impact. Moreover, as the purchasing manager of Primark I would initiate training programs that are geared towards establishing sustainability in the supply chain and addressing the emerging issues in the supply chain that are bound to counter the overall goal of meeting the set quality criteria and standards. I would as well focus on putting into account cooperate social responsibility considerations thus enhancing customer satisfaction (Kauffman, et al 2006). In order to actualize the goal of working with suppliers to ensure that the products that are sold by Primark meet the set quality criteria and meet the needs of the customers, as the Primark purchasing manager, I would formally collect and record information on supplier sustainability. This information would aid in strategy planning for the future and executing both internal and external planning. Bibliography Baily, P & Jones, D, 2005, Purchasing principles and management, Prentice Hall, New York Cousins, P., Lamming, R., Lawson, B. & Squire, B, 2008, Strategic Supply Management: principles, theories and practice. Prentice Hall, New York. Harland, C & Eugene, S, 2008, The SAGE Handbook of Strategic Supply Management: Relationships, Chains, Networks and Sectors. Sage Publications, New York. Kauffman, R, et al, 2006, The supply management handbook, McGraw-Hill Publishers, New York. Handfield, R & Robert, M, 2008, Purchasing and Supply Chain Management, Cengage Learning publishers, UK. Owens, J, 1996, Strategic procurement for the NHS: working with suppliers. National Association of Health Authorities and Trusts Publishers, New York. Read More