1. The Procurement and Supply Manager’s Desk Reference Second Edition
Chapter 4
Supplier Selection Criteria

2. Topics – Chapter 4 Selecting the supplier
Operational Measures and Measures of Efficiency
Applying Selection Criteria
Other considerations

3. Selecting the Supplier
Chapter 4
Evaluating Offers
Responsiveness
Capability
Operational capacity
Technical ability

4. Selecting the Supplier
Chapter 4
Financial Analysis
Measures of Liquidity Current Ratio
Quick Ratio
Receivables Turnover Ratio
Payables Turnover Ratio
Debt to Equity Ratio
Measures of Profitability
Gross Profit Margin
Net Operating Margin
Return on Assets
Return on Investment

5. Selecting the Supplier
Chapter 4
Financial Data Sources
Dun and Bradstreet:
EDGAR:
Hoovers:
MarketWatch:
Standards and Poor's:
Moody's:
Equifax Supplier Data Management Services

6. Selecting the Supplier
Chapter 4
Market Share Service Quality Management Process Customers and Reputation Financial Stability

7. Applying Selection Criteria
Chapter 4
Qualifying the supplier
Order processing and fulfillment
Operations
Quality systems
Cost control
Finance
Management

8. Applying Selection Criteria
Chapter 4
Quantitative Analysis
Weighted Average Scorecard

9. Applying Selection Criteria
Chapter 4
Weighted Bid Analysis
Example:
Supplier A has a poor billing process Measured additional cost is 1%
Supplier A’s shipping cost 2% more
Supplier B has no added cost factors
Supplier A’s original bid $142,000
Supplier B’s original bid $144,000
Supplier A’s transformed bid adding 3%
= $146,200

10. Other Considerations Ethical Principles Managing Records and Data
Chapter 4
Ethical Principles
Example:
Managing Records and Data
Importance of documentation

11. Summary