Monday, January 3, 2011

Supplier Evaluation

In many companies the cost of outsourced product can be 50% of their Income Statement. Should suppliers shut down production it will stop revenue generation, as nothing can ship.

It has been theorized that competition today is not between similar businesses, but between supply chains. A strong agile supply chain is a competitive advantage. A strong supply chain can shorten time your to market for new products; it can improve your quality and shorten your overall production cycle time.

As a former Quality Professional I realize the importance of risk free quality. Every shipment should be within specifications, every time. If you practice JIT (Just in Time) scheduling, you cannot afford to have a shipment fail to be correct and timely.

Imagine you have a fine supplier who meets all of your expectations and one day they are closed. Perhaps they had a poor financial condition; many suppliers are good at what they do and are not good businessmen.

Supplier Audit- Conducting an onsite audit is a great method to discover who your supplier is. This method is a standard in many industries and many suppliers have staff trained for preparing and conducting an audit. Auditing some companies is an exercise in cutting through fluff to reveal the substance, in many cases there is not substance behind the fluff. An experienced auditor is able to get into the substance and evaluate whatever should be uncovered.

Many companies are not able to maintain an experienced professional on staff who can perform the range of investigation needed to uncover world class suppliers.

Using a third party evaluator insures judgment is. Many suppliers employ techniques meant to sway an Evaluator’s judgment of their company. An Independent evaluator is your agent whose goal is to gain your repeat business by providing you with sound recommendations.

Let’s face it, it takes time to develop experience, is your business able to wait for in house talent o gain experience. In the course of a year do you have enough Supplier selections to retain a full time employee?

By retaining my services you are teaming with an executive with over 30 years of manufacturing experience. My experience has included evaluating and developing numerous suppliers. My education is a Certified Masters of Business Administration specializing in Strategic planning; I understand business processes and the close relationship of business improvement and supplier quality. My philosophy is that a poor supplier will hold your company down and that selecting a first class supplier is a strategic advantage for your business.

Many times a good supplier wants to improve and will ask the evaluator what they can do to improve. At this point I will work with the supplier setting up the systems that I know will improve their level of service to you.

Other times a poor supplier wants to retain your business, but does not know what they can do to improve, I will work with your poor suppliers to improve their operation to exceed your expectations.

I can offer an objective view of what improvements you can make to your procedures which will assist your Suppliers in satisfying your needs. It is not uncommon for a company to feel its processes not flawed, later to find out they are hindering their supplier’s performance.