Supplier Selection - Research Paper Example

425400 Interim Report Decision Making: Supplier Selection. BackGround study Selecting the right supplier forthe business doeas not only include just scanning the price list but more than this. The choice would depend on several other factors including the money value, reliability, quality of the supplied materials as well as the service offered. The approach used in weighing these factors would depend on the organization’s priorities as well as the company’s strategy. The approach of strategising fior right suppliers would help the company in comprehending how their own potential clients measure up their decisions as far as purchasing decisions are concerned. The company have to choose its suppliers considering its basic business requirements. It therefore needs to operate with other companies have strong management processes as suppliers coupled with effective approaches meant for establishment of their work force in order to ensure that they imrove continuously as well as consistently. According to Aera Energy (2009) the process of choosing a potential supplier for the business needs to be based on the crucials criterias which are specific to particular porcess and indicative of the company’s future success. These criterias are then evaluated and the significant attributes for the processes then chosen. Problem Statement Some usually source for their relevant materials for their business projects from suppliers withuout evaluating to find the right ones. Such suppliiers dont provide them with the right and high quality materiials they aspire to get. Their oprojects end up being either costly, behind time schedule or less productive than if they got the most appropriete suppliers for the materials. Most of these suppliers are not reliable, hence the businesses starts sometimes ends up looking for more materials from other suppliers to supplement them , something which adds cost and spends more time for the company. There is therefore the need to for the company to take tiome and do the necessary selection cretria for suppliers in order to avoid such shortcommings. Selection of the right suppliers would not obnly include looking at the price list of the materials requierd by would also encampass consideration of several factors which would lead to selecing the most competent and reliable suppliers. Justification While doing procurement process for the organization’s materials there would be the need of reducing the potential costs as well as time duration for the process in order to increase productivity of the project or process hence the firms sustainable development. One such approach of achieving this would be by sourcing from the right suppliers who are having lowest costs for the materials, the highest quality, reliable in such they will offer the materials and equipments whenever required and at any time and in the shortest time possible. This would help the company in getting guidelines and more potential sources that would be utilized in the crucial strategic planning for purchasing the materials and components as required. Such a strategy would also help the company in enhancing policies. The only approach to use in order to achieve these is to consider the most crucial factors in the selection criteria. One such approach would be the thorough evaluation and analysis of check list for examination of the supplier’s suitability. Establishing such an approach would enable the organization to attain its procurement policies hence success in its operations. Factors Considered in Evaluating Considerations & Measures for Selection of the Most Appropriate Supplier. During the selection process, it was necessary to use a supplier selection check list which was meant for eveluating the suitability of the suppliers. The number of times the company uses this check list for the same operation depends on the company’s needs and requirements. The initial selection procedure had to include factors such as the number of suppliers, how critical they were to the organization as well as their respective locations. Geaographical considerations included the nature of the spread of their offices and the sort of businesses they were having. Other factors put into consideration during the initial selction procedures were such factors as the number and type of customers the suppliers had been working with in such projects as the organization’s and what they had done with other parts of the business. Having a large number of customers indicated that the suppliers had been appropriete to many and were most likely to be reliable. Therfore, there was the need of going for the suppliers who had been workng with a thousand clients dealing with the asame projects as company’s than those supplying two customers only. More information regarding the supploers was gotten from such customers. There was also need to consider if the potential suppliers had been working with any of the company’s rival competitors its projects. Suppliers who had worked with competitors of the company were not considered as appropriete for the job. The ones who were not dealing with the company’s competitiors and those who had lower costs and high quality in order to out do the rival competitors. Considering such factors gave the company a rough idea of the kind of suppliers to select from. This provided a short list of the suppliers who the company could work with. More specific factors which were put in to consideration in order to get the right supplier iclude the following: Partnerships The Number and nature of partnerships that the suppliers were involved in were also considered. Such included the range and the quality of their formal partnerships. Where such partnerships happened to be weak, then there was need to evaluate if the suppliers had informal network that could be depended upon in providing additional and specialist resources. Existiing Relationship There was also the need of finding out if there were any existing relationships with the potentia supplier as well as the nature of work has been done with them in past years. Has there been any terms in the relationship and how long has the relationship lasted. Delivery Capability The potential supplier was chosen because they had a range of services that were required for finishing the project. Such services included technical issues like documentation, implementation and design. This was becasue the necessary delivables would be available when and where needed.Others included support, project management creativity and application. Quality of Deliverables The suppliers need to offer evidence of work which is of quality. these work had to comply with the companys standards. The resources which the supplier was able to offer had to be enough to execute the work of the project.There was need for contigency in planning of the resources and these resources needed to be in a position to handle the unexepected situation. Any specific or named resources which were to be allocated were also considered. Also put into consideration was the level of customer interference in the project in terms of account management, business consultant and technology consultant. Whele evaluating the necessary processes, such factors as robust, repeatablity and measurable proceses which were intented for creation of such deliverables were critically evaluated (Aera Energy, 2009). Other factors put into consideratino included the formal certification of the processes, tracking and reporting procedures which were present. Such processes encompassed documentation, communication of team projects, tracking of projects and procedures for progress reporting, management of changes and control of several processes. The processes of the supplier ought to match with those of the company’s project control prosedures and modifications (Aera Energy, 2009) For design of formal processes, such issues as the stardards of such processes, the methodology employed and the supplier’s potential of interpreting and signing off the design documention work which would be establushed were looked at before getting the suppliers. As far as technical status is concerned, there was need consider if the said suppliers had the required technical infrastructure for development of the application. They had to have the processes tested in environments which were compatible with company’s. There was also the need for clear agreement between the variables ownership. From the list of candidate suppliers, the pprefferd ones were the ones who the required flexibility to handle upset schedules as well as changes to requiremetns. They had to be actually honest as far as problems are concerned. Other factors condered in gfeting the most appropriete ones included their perception other clients, their comfort while with them and their level of integrity to stand by their offerings. They had to be comfortable and when needed to be audited technically or finacially? The suppliers had to understand the major objectives of conducting such business. The appropriete supplier also had to offer sensible and appropriete advice on slolutions which have the pootential. A good supplier also ought to be have the will to operate with a third party development environment. They had to comprehend the multingual demands for content delivery and its impact on mantainance complexity. Such an approach needed to create a solution that was in a way that allows others such as internal functions to give it the required support (Aera Energy, 2009). Before selecting the supplier, one had to consider if they would exist for the duration of time that the company would needed them. A good supplier did not have to go broke while dealing with the company. They were suppolsed to be in a position where they could accept payment by the end of the project. In addition to this, there was need for a clear agreement regarding the ownership of any deliverables. The interest of the suppliers and those of company needed to be well protected while selecting such suppliers. The company had to evaluate the daily rates and how they varied in addition to balance between cost, time and the quality. The most appropriete supplier needed to have the quality to execute within the time schedule of the project.Other factors which were considered in getting the suppliier included work hours, holidays, time for resoponse and the appropriete call management processes. Table of Scores The selected suppliers was the one who acheived the highest scores as follows # Description Score (1-10) Pass (Y/N) Comment 1 2 3 4 5 6 7 Status of the supplier Capability for delivery Processes Technical Status Culture of the Supplier Commercial/Financial Status Support 7 8 9 6 8 8 6 Y Y Y Y Y Y Y Approprite Very good Excellent Good Very Good Very Good Good Conclution Evaluating the supplier using such an approach enebled the company to get the suppliers who can fulfil the needs of the company. There was therefore the need of examining the potential areas which the supplier had to satisfy before being recruted. The best supplier did pass all the required tests and fulfilled the most crucial requirements and was therefore selected. This was meant to reduce the time of supply, the quality of the materials supplied, cost reduction of these materials as well as the prodcutivity of the project hence the overall improvement of the project and company profitability. Work Cited Aera Energy. 2009. Prospective Suppliers. 2009. Accessed on March 21, 2010. < http://www.aeraenergy.com/WorkingFor/wf-SupplierSelectionProcess.htm > Read More