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CHAPTER 5
SUPPLIER RELATIONSHIP MANAGEMENT
Figure 5.1:
Supplier selection process.
• Assembling an evaluation team:
Assemble a team of people who have a
vested interest in the particular supplier selection process. If the goods to be
purchased are critical, appropriately qualified individuals from key functional
areas such as operations, engineering, finance and procurement should be
included in the team. Each will play the role of providing the expertise related
to his/her particular area.
• Defining the product, material, or service:
Define the specifications for the
product, material or service for which a supplier is being sought. The technical
and business requirements to be involved in the purchases as well as the
expected supplier requirements are also clearly spelt out. Team members
may also be consulted in the process.
• Discovering potential suppliers:
This is the process of searching for a list
of potential suppliers who will be able to deliver the products, materials or
services required. Sources that can be consulted in order to get potential
suppliers include supplier websites, the department’s supplier database,
trade journals, trade shows and professional organisations.
• Evaluating potential suppliers:
After compiling a list of potential suppliers,
the supplier selection team evaluates each prospective supplier against the
criteria set in Stage 2 of the supplier selection process. Various instruments
are available for this purpose and include supplier surveys, financial condition
analysis, third party evaluators, evaluation conferences, facility visits and
quality capability analysis.
• Selecting suppliers:
When one or more suppliers have succeeded in the
evaluation phase, the supplier selection team invites the potential suppliers to