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Supplier Management

A friend of mine defines what 'Supplier Management' is like the 'art' to have good relationship with your suppliers in critical moments.

I agree.

Supplier Management is the first step of the purchasing policy. It sets the evaluation criteria to determine the preferred suppliers. The goal is to qualify each supplier with a STRATEGIC PURCHASING STATUS and build a PANEL of preferred suppliers, those who have met the evaluation criteria. This panel serves to provide answers to internal customers (development, production, quality ...). It also serves to show to your main customers that your company manages the purchasing in a correct manner.

Supplier Management applies to old suppliers, who have previously worked with your company, to existing and to potential ones, those who want to work with your company and those that your purchasing department is searching.

STRATEGIC PURCHASING STATUS must be revised every six months depending on the evaluation criteria. It is applicable to a supplier of general way, but if you want to go into more detail, you can define a STRATEGIC PURCHASING STATUS by supplier site or by each technology in a supplier site.

In this section, you will find information about :

  • Supplier Purchasing Status
  • Supplier Strategy
  • Mandated Suppliers
  • Supplier Meeting Review - Steps to Heaven

 


 



Supplier Strategic Status

A Supplier Strategic Status is a label. This label shows how much this supplier complies with your business criteria.

There are 6 (six) different Supplier Strategic Status:

  • PANEL: The supplier fulfills all your business criteria.
  • AUDIT: The purchasing department is currently investigating if the supplier fulfills your business criteria.
  • LOCKED: The supplier do not fulfills your business criteria. An action plan is (or will be implemented) to solve this issue.
  • TO BE ELIMINATED: The supplier do not fulfills your business criteria and an Exit plan has been (or need to be) defined.
  • ELIMINATED: The supplier has been eliminated of the Supplier List.
  • REJECTED (only for Potential Suppliers) : The Purchasing Dpt. refused the access to the Supplier List.

Usually the perimeter of a Supplier Strategic Status is the Supplier Generic Name, but in other cases, the perimeter can be:

  • the Supplier Site or
  • the Supplier Site Technology
  • or/and a Sub Supplier Technology.
Read more...
 

Supplier Technical Status

The 'Supplier Technical Status' is measuring the technical capacities in general.

We can define 3 different "Expert Level'.

EXPERT: an 'expert supplier' can help you to define the functional specifications, propose solutions and participate in design. He is autonomous and responsible for his processes and designs, he will manage and design complete sub-assemblies.

DESIGNER: a designer supplier design complex items based on your functional specifications with full design and process responsibility.

MANUFACTURER: a manufacturer is responsible for its own processes. This supplier do not take in charge design responsibilities.

 

 

 

Supplier Quality Evaluation

There are several methods to evaluate the supplier quality.

In this post I list the most relevant.

 

1 ) Quality Certifications

2 ) Audit Form

3 ) Audit Visits

 

 

Read more...
 

Supplier Evaluation Criteria

There are 6 main criteria to check when evaluating a supplier :

a) Quality Certifications

b) Business Requirements

c) R&D Resources

d) Competitiveness

e) Quality Level in Mass Production

f) Production

We recommend that you fix 3 levels for every criteria : Preferred, Acceptable, Unacceptable.

In some cases you can define the frequency of measurement for the criteria : weekly, monthly...

 

Read more...
 

Supplier Strategy

We start now a difficult subject.

First, I would like to say that you have several choices.

a) You can buy several 'theological' books about this subject (400 pages each) and spend several weekends reading it.
b) Or you can pay a (very expensive) expert during several days to learn things you already know.
c) Or you can do a (very expensive too) training to learn things you already know.
or
d) You can give me an opportunity a read this post.

One day, long time ago, my boss (at that time) demanded to me a presentation (obviously power-point) with 'your purchasing strategy in my portfolio'. I recognize that I came back to my desk completely lost. Ten minutes later I came back to see my boss.

 

Read more...
 

Some Questions for a Supplier

When you meet a supplier you can ask over 300 questions in order to know what kind of supplier it is, but it would be better to ask only 30 relevant questions

Let's start defining the approach about your suppliers.

 

You can meet your supplier in very different situations and probably you have different levels of knowledge about your suppliers. You can meet a new potential supplier during a trade show or you can have an informal dinner with a historical supplier of your company, or you can spend two days inside the supplier’s facilities performing quality assessment. In all these cases, you need to recover some information.

I would define 3 different approaches:

 

Read more...
 

Supplier Audit Form, that is the question.

 

An industrial company needs a Supplier Audit Form.

You can find on the web a lot of forms

By the way we propose you our form here.

 

But the subject of this post is different. now I would like discuss about the question's forms itself.

 

Read more...
 

Supplier ID Card

Creating a Supplier ID Card is not difficult. The main mistake is mixing all the information about the supplier without any clear criteria.

There is general information about the Supplier Name and general information about the Site Supplier Name.

A Supplier Name is a generic name for a supplier.

A Site Supplier (Name) is a physical place.

Some examples:

The Ownership information is linked to the Supplier Name.

A Contact name (a production manager for example) is linked to (at least) one specific Site Supplier Name.

A Quality Certifications is always linked to a specific Site Supplier Name and not to a generic Supplier Name.

The Financial Status is linked to the Supplier Name.

In some cases, the same type of information can be linked to the Supplier Name and to the Site Supplier Name.

 

Read more...
 

Supplier Strategy Perimeter

A lot of people think that define a 'Purchasing Strategy' is something very difficult to do.

If you buy a book about 'How you can define your Purchasing Strategy ?', probably you will have 500 pages to read during the next weekend.

 

I will try to give my point of view in 20 lines, and if I met my target, you will spend a quiet next weekend.

Let's go!

 

Read more...
 

Preparing Nagotiation with Suppliers

 

Before start a negotiation with a current suppliers, I recommend you to write down a short summary of the main items to have in mind before entering in a negotiation round.

1-Evolution of the turn-over in the past years.

2-Potential evolution of the turn-over in the future:
- attributed programs
- and potential non attributed programs and reasons why.

Read more...
 


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