Intro to Supply Chain Test 3

Chapter 7 - 9

Supplier relationship management

Planning for and managing interactions with the third part organizations supply goods

to have a strong supplier partnership you need

strategic perspective and a mutual commitment with extend time

keys to successful strategic partnerships

collaboration, shared vision, communication (formal and informal), compatible needs, support, manage change, have the right technology and capabilities, continuous improvement

the process utilized in continuous improvement

plan, do, check, act

total cost of ownership

all costs associated with the acquisition, use, and maintenance of a good of service

Supplier evaluation

process to identify the best and most reliable suppliers, with decisions made based on facts and the use of frequent feedback

Supplier performance evaluation

used to monitor visibility and feedback with price, cost, quality, delivery, etc.

key supplier selection is conducted by

a cross functional team using evaluation forms or scorecards

supplier evaluation: weighted criteria

select key dimensions, monitor and collect performance data, assign weights, evaluate performance, multiply dimension rating by weight and sum of overall score, classify suppliers (certified, preferred, acceptable, conditional, developmental, unacceptable), audit and perform certification review

Preferred weight criteria evaluation

work with these suppliers in maintaining a competitive position and on new produce development

Acceptable weight criteria evaluation

require a plan from these suppliers outlining how they will achieve preferred status

Developmental weight criteria evaluation

require corrective actions from these suppliers on how they will achieve acceptable level, look for alternative suppliers if they do not achieve acceptability

performance measure formula

rating x weight = final value

Certified supplier

a source that can provide material of such quality that it needs little if an receiving inspection or testing before going into approved stock or into the product process

Benefits of supplier certification programs

reduced time and labor for incoming inspections, long-term relationships, recognized excellence, decreasing supplier base

Internal certification program criteria

no defects, no rejections, no significant quality related incidents, ISO 9000 certified, meets performance measures, fully documented process and quality system, stable

ISO 9000

management and quality standards in design, development, production, installation, and service

ISO 14000

a family of standards for environmental management

ISO 9000 quality management principles

customer focus, leadership, involvement of people, process approach, systems approach to management, continual improvement, factual approach to decision making, mutually beneficial supplier relationship

ISO suppliers are preferred because they

have a set of standards, initially qualify and periodically audit, open to sharing, continuously improve, and have to be recertified every 3 years

Supplier development

the technical and financial assistance given to existing and potential suppliers to improve quality and/or delivery performance

two important functions of a supplier development program

providing information about products, expect sales growth, etc. and training suppliers in the application of lean and six sigma/quality tools

early supplier involvement

key suppliers become more involved in the internal operations of the buyers company, particularly with respect to new product and process deign

value engineering

help the buyer’s company to reduce cost, improve quality and reduce new product development time beginning with the initial design

supplier recognition programs

program to recognize suppliers who achieve the high performance standards necessary to meet customer expectation

three attributes of supplier recognition programs

companies should recognize and celebrate achievements, award winners exemplify true partnership, and award winners serve as role models for other suppliers

benefits of supplier recognition programs

motivate suppliers, improve supplier loyalty, encourage suppliers to adapt to the company’s culture, helps create entry barriers, and encourage supplier participation in product innovation

the reason for a system to provide a more comprehensive and objective view of a supplier performance

it will help identify and address supplier performance issues and it can be used to help make sourcing decisions

5 key characteristics to consider in the development and implementation of a SRM system

automation, integration, visibility, collaboration, and optimization