Supplier Selection
Training for Selecting the Right Supplier
by
Scott Mathusek
10 April 2010 Supplier Selection 1
What will be covered
• Supplier Selection Defined
• Brainstorming Exercise
• Supplier Evaluation and Selection Process
• Real World Example
• Practice Exercise
10 April 2010 Supplier Selection 2
Supplier Selection Defined
• Supplier: “External entity that supplies relatively
common, off the shelf, or standard goods or
services” (Business Dictionary)
• Supplier Selection: “The stage in the buying
process when the intending buyer chooses the
preferred supplier or suppliers from those
qualified as suitable.” (Westburn Dictionary)
10 April 2010 Supplier Selection 3
Brainstorming Exercise
• Why is supplier selection so important to
your organization?
• What can result in your company from
having the incorrect supplier?
• What is important to you when finding a
supplier?
10 April 2010 Supplier Selection 4
Evaluation and Selection Process
1. Recognize the need for supplier selection
2. Identify key sourcing requirements
3. Determine sourcing strategy
4. Identify potential supply sources
10 April 2010 Supplier Selection 5
Evaluation and Selection Process
5. Limit suppliers
6. Determine method of supplier evaluation
and selection
7. Negotiate and select supplier
10 April 2010 Supplier Selection 6
Recognize Need for Supplier Selection
• Why are you looking for a supplier?
– End of contract
– Problems with current supplier
– Have new product
10 April 2010 Supplier Selection 7
Identify Key Sourcing Requirements
• What do you require from your suppliers?
• Are your requirements in alignment with
company goals and mission?
• Consider Carter’s 10 C’s of Supplier
Selection
10 April 2010 Supplier Selection 8
Carter’s 10 C’s of Supplier Selection
• Competency • Commitment to quality
• Capacity • Cash/finances
• Consistency • Clean
• Control of Process • Culture and relationships
• Cost/Price • Communication
10 April 2010 Supplier Selection 9
Determine Sourcing Strategy
• How many suppliers are you going to need?
– Single Source
– Multiple Source
10 April 2010 Supplier Selection 10
Identify Potential Supply Sources
• Where can you find your suppliers?
• Simple brainstorming activity will generate
a long list of possibilities
10 April 2010 Supplier Selection 11
Limit Suppliers in Pool
• Narrow down your choices
33%
33% 40%
40%
75%
75% 43%
43%
100%
100% 36%
36% 22%
22%
25%
25% 57%
57%
31%
31% 18%
18%
A
10 April 2010 B C
Supplier Selection D E12
Determine Method of Supplier
Evaluation and Selection
• Choose what you would like to evaluate
• Decide where you will gather your
information from
• Make selection from your evaluations
10 April 2010 Supplier Selection 13
Negotiate and Select Supplier
• Perform negotiations with supplier
• Choose supplier and agree to terms
10 April 2010 Supplier Selection 14
MFG.com
• Moves to India to better position themselves
as a buyer
• Looks to specifically increase competency,
commitment to quality, and capacity and
lower cost/price
10 April 2010 Supplier Selection 15
Practical Exercise
• You and three others have narrowed the search
down to four companies
• Using Carter’s 10 C’s you have chosen four factors
you will use to evaluate and have also assigned each
factor a weighted percentage
• Perform a weighted factor analysis to decide which
company to is the best option
10 April 2010 Supplier Selection 16
Column1 Danny Ryan Jane Helen Mode Average
Competency 40% 30% 25% 30% 30% 31%
Capacity 30% 30% 25% 20% 30% 26%
Consistency 20% 20% 25% 30% 20% 24%
Control of
10% 20% 25% 20% 20% 19%
Process
A B C D
Competency 77 90 76 85
Capacity 85 85 85 90
Consistency 95 86 95 87
Control of Process 90 95 90 90
10 April 2010 Supplier Selection 17
MODE A B C D
Competency 23.1 27 22.8 25.5
Capacity 25.5 25.5 25.5 27
Consistency 19 17.2 19 17.4
Control of Process 18 19 18 18
Total 85.6 88.7 85.3 87.9
AVERAGE A B C D
Competency 24.1 28.1 23.8 26.6
Capacity 22.3 22.3 22.3 23.6
Consistency 22.6 20.4 22.6 20.7
Control of Process 16.9 17.8 16.9 16.9
Total 85.8 88.7 85.5 87.7
10 April 2010 Supplier Selection 18
Summary
• The evaluation and selection process is
much based off of company goals, missions,
and preferences
• Use Carter’s 10 C’s to have a more
encompassing evaluation
10 April 2010 Supplier Selection 19
Readings list
All information used for this presentation is based from information from the following sources:
• Fuller, Neil. “How Many C’s in Partner?” All Business. Supply Management, 8 Sept. 2005. Web. 5 April
2010.
• Hadaway, Jordon. “Supplier Selection.” 12Manage The Executive Fast Track. 12Manage. 6 January
2010. Web. 7 April 2010.
• “Home: Sourcing Platform MFG.com Launches India Operations.” NetIndian, 3 April 2010. Web. 8
April 2010.
• “Supplier.” Business Dictionary. Online Business Dictionary, 2010. Web. 5 April 2010.
• “Supplier Selection.” Westburn Publishers. The Westburn Dictionary of Marketing, 2002. Web. 5 April
2010.
• Oxenbury, Alan. “Making the Right Choice.” Supply Management. Supply Management, 20 July 2006.
Web. 6 April 2010.
• Oxenbury, Alan. “The Final Countdown.” Supply Management. Supply Management, 3 August 2006.
Web. 6 April 2010.
• Wallin, Cynthia. “Supplier Selection.” Brigham Young University. Microsoft PowerPoint file. 9
February 2010.
10 April 2010 Supplier Selection 20
