Chapter 13 Supplier Evaluation and Supplier Relationships ©McGraw-Hill Education. All rights reserved.

Key Questions Addressed in Chapter 13 How do we evaluate supplier performance? How do we manage our supplier relationships?

Example of a Categorical Supplier Evaluation and Rating ©McGraw-Hill Education. All rights reserved. 3

Weighted Point Evaluation Systems Identify suppliers – Important suppliers and/or critical goods and services Identify factors or criteria for evaluation Determine the importance of each factor Establish a system to rate each supplier on each factor ©McGraw-Hill Education. All rights reserved. 4

Customer Satisfaction and Supplier Performance ©McGraw-Hill Education. All rights reserved. 5

Buyer-Supplier Relationship: Investment Versus Rewards Obtained ©McGraw-Hill Education. All rights reserved. 6

View of Buyer-Supplier Relationships ©McGraw-Hill Education. All rights reserved. 7 Traditional Lowest price Specification-driven Short-term, reacts to market Trouble avoidance Purchasing’s responsibility Tactical Little sharing of information Partnership Total cost of ownership End-customer driven Long-term Opportunity maximization Cross-functional teams and top management involvement Strategic Both supplier and buyer share short- and long-term plans Shared risk and opportunity Standardization Joint ventures Share data

The Deployment Path to Partnership ©McGraw-Hill Education. All rights reserved Supplier Assessment (Potential) 2. Supplier Improvements 4. Supplier Alignment 3. Supplier Rationalization Supplier Partnership 1. Supplier Assessment (Potential) 2. Supplier Improvements 4. Supplier Alignment 3. Supplier Rationalization Supplier Partnership