Knowlton Project Support

Supplier selection – is it an art or a science?

Identifying suppliers that consistently meet our Quality, Cost and Delivery expectations can be a real challenge. Is there a simple formula for supplier selection, or is it okay to rely on our intuition and gut feel?

Click here to Benchmark your suppliers Lean performance, it takes just 15 minutes (Sample Report)

Here are my top 5 tips for supplier selection, but what do you think is important to consider when selecting a new supplier?

1. Assess potential risks when selecting strategically important suppliers.

–  Could their geographic location pose a potential risk or impact lead times?

–  Do they have the ability to meet both our current and future capacity demands?

–  How reliable is their logistics / delivery capability?

–  What do we think of their financial stability in the long term

– What is the alternative supply option should they fail to meet commitments?

2. Commercial considerations go beyond the lowest price.

– Is their price competitive?

– Are they  co-operative, flexible and keen to work with us?

– Do they have polices and procedures covering CSR, Quality, Safety, Environmental

3. Understand their resources and capabilities

– What are their Management capabilities and do they have a succession plan?

– What are their Design, technological and Machinery / Equipment capabilities?

– What is their annual investment in R&D and Training?

4. Supplier performance

Quality, Cost and Delivery are recognised as Key Performance Indicators – but can the supplier demonstrate past performance with thier existing customers?

5. Continuous Improvement

As well as driving day to day performance, effective supplier development strategies include a programme of continuous improvement where the rate or degree of improvement can be measured, for example:

– Order cycle time reduction from order placement to receipt of goods

– Reduction in parts per million defects

– Improved on time delivery

– Price reduction

– Reduction in new product development time from concept to volume production

Click here to Benchmark your supplier performance (Sample Report)

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