Introduction Selecting suppliers by lowest price or nearest location which has been used since ancient times is not sufficient in today’s competitive environment. Nowadays selecting supplier has been an important decision that affects the organisation objectives. So researches have been conducted and case studies have been explored and investigated to reach the optimal approach to select a supplier that satisfies both customers and stakeholders and to achieve the organisation goals. Therefore, a multi-criteria decisionmaking process should be adapted to execute supplier selection operation properly. Resources selection needs to go through many steps to assist decision-makers to do their job elaborately. Sustainability of the supplier has …show more content…
Does one reliable resource is enough to maintain sustainability? How is that affecting the multiplicity of suppliers? This research will also outline the main obstacles that affect the decision making for the selection of the sustainable resource. Literature Review Supplier selection Basic and old methods of selecting suppliers had considered only the economic aspects. These methods cannot meet the necessity of today’s businesses, and therefore, social and environmental aspects have to be included in supplier selection to develop and enhance the organisation performance. One of the key problems in Supply Chain Management SCM is supplier selection (Wu and Barnes, 2011 and Huang and Keskar, 2007). This is a complicated multi-criteria decision-making problem (Chai, Liu, & Ngai, 2013). Supplier selection process can be explained as a multi- criteria decision-making problem with discordant and different goals. Also, this process consumes more time to exploit the data. In organisations, the substantial purchasing decision is selecting a reliable supplier, which helps to reduce production costs and enhance production quality and customer satisfaction. Choosing an appropriate supplier considerably reduces cost, causes to competitive advantage and increases the level of customer satisfaction (Nazeri et al. 2011). Reliable supplier selection is an essential strategic decision for the organisation to develop the top quality of production
Second, always make sure there is an alternative source. As I mentioned before, this is much easier with single source procurement (but not sole source), since other similar suppliers could be able to supply similar products with more or less that same quality as the previous suppliers.
{Build the Supply Base: supplier selection1. supplier evaluation- find potential suppliers, supplier certification (qualification, education, certificationISO 9000,14000). 2. Supplier development- integrate supplier in system, quality require, product specs, schedule/delivery, procurement polices, training, engineer/production help, information transfer procedures. 3. Negotiation- significant element, strategies: Cost based price model (open books to supplier, based on time and materials) Market based price model (based on published, auction, index prices: commodities) Competitive bidding (most common, no longterm relationship, request for rfq). 4. Contracting- share risks, benefits, incentives. Centralized purchasing, E procurement (online catalogs/exchanges, online auctions).} Logistics MGT- obtain efficient operations through integration of all material acquisition, movement, and storage activities. Frequent for outsourcing, allow competitive advantage from reduce costs and improve customer service. 1.Shipping systems: truck(flexible, moves majority manufactured goods) rail( large loads, containers) Airfreight( fast/flexible light loads, expensive) water( used for bulky low value cargo, oldest way of transportation) Pipelines( transport oil, gas,
The three criteria that would apply to most projects include payment terms, on-time delivery performance, and reputation. It is important for a company to use the reputable supplier and the one who it has partnered in past projects. These criteria are essential in the project success because these could
The topic selected is (Strategic Procurement & Supply Chain Management). For this study, we have selected Toyota Motor Corporations as our company of choice. Toyota is without doubt the best in the world, with its many philosophies and principles on how to make the best out of the least; JIT, lean production and elimination of waste and the desire for continuous improvement are just a few ways how Toyota has become the best in the auto industry. Toyota as a name, a company, and as a brand has become synonymous with Quality.
People: The emergence of the triple bottom line has led to companies becoming more aware of how their decisions affect not only employees and customers but those within the community they operate in. To achieve this in an ever changing global world a company needs to create policies and guidelines on how to select suppliers and evaluate performance.
Various important approaches like engineering driven approaches and selection of supplier processes lead to the number of suppliers at premium prices. It reduces cost of
It is quite challenging to discuss about procurement management without stating the importance of its strategies. There are four main basic procurement strategies that serve different functions within a procurement management. To begin with, a “Partnership” strategy focuses mainly on constructing mutual commitment in long term relationship with suppliers. While a “Secure Supply” strategy aims to secure short and long term supply while reducing risk from suppliers. In addition, a “Category Management and E-Procurement solutions” serves as a tool to reduce logistic complexity, improve operational efficiency, and attempts to reduce the number of suppliers. Lastly, a “Competive Bidding” strategy emphasizes on obtaining the “Best Deal” for short term transactions with suppliers.(van weele) Each of these four strategies involves a unique purchasing methodology, which implies that the complexity is embedded in an individual strategic implication. Therefore, it requires different tools to accomplish the specific strategical characteristics. A business entity may need to support and execute procurement decisions with other strategic apparatus with analytical methods, including market analysis, uncertainty analysis, price forecasting, supplier relationship and along with others.(Harvard)
The purpose of this case is to familiarize the student with the conflicts between price, service, time, and quality that occur when selecting a source. Selecting satisfactory suppliers is one of procurement's major responsibilities, and when done correctly, can lead to optimal trade-offs between the four conflicting factors in a purchase decision.
Before you can find the right supplier, you need to be very clear in exactly what products you’re looking for and how many you’re looking for. What products will you be selling? Do you need a manufacturer or trader? Have you identified your initial demand for the product you’re looking for a supplier for? Or do you plan on drop shipping?
How suppliers’ perceptions and your bargaining position affect your supply strategy. This focuses on suppliers’ perceptions, the effect on supplier relationship, reverse marketing, trade-offs between switching costs.
Imagining a world where all the resources are abundance: we get what we want, we create, we consume, and we destroy.
The sourcing strategy is determined as new evolution in supply chain management in comparison with traditional sourcing method. Previously, the companies made sourcing decisions through peers to peers discussions between the companies and the suppliers. This discussion could be explained as process of the suppliers and the companies use expressive language in order to reach win-win deals. This process might be helpful in the dimension of which the companies and the suppliers can highlight their worries about the procurements and to identify the solutions to better overcome (Sandholm et al., 2006). However, this process, normally, often takes time and it lacks of structure and transparency. Further, the traditional method creates the difficulties in making final decision in case there are not so many suppliers that
In recent years sustainable supply chain management is one of the most interesting issues among supply chain experts. The sustainable supply chain focuses on social, environmental and economic performance measures as main pillars of sustainability. Environmental aspects of the sustainable supply chain include input- oriented factors such as renewable energy sources, natural resources, water and energy consumption or water quality, while output- oriented factors concentrate on waste and pollution[1]. In New Zealand, natural environment provides various benefits such as high quality of life, tourism attraction and basis for the country’s large exports of agriculture. Water pollution and climate change are the main concerns of the country as
The Lean Supply Chain Management (LSCM) approach leads to several effects in the firm. To begin with, due to the planning process involved, a company will reduce the number of suppliers that they have for each commodity that they regularly purchase. The approach will bring about the concept of vetting and which will lead to one or a few suppliers (Slack, Chamber, & Johnston, 2007). Additionally, a company will look into the finer details of the company that they intend to keep as their supplier. They (the company) will look for details about corporate culture, growth plans, and technology and check if they tally with its own. A supplier whose detail will be similar with that of the company will then be taken up and upheld as the supplier. The aim of this will be to maintain a cordial relationship that will be defined by similar principles. Further, a company will identify and keep supplier partners because of the future growth of the company.
MANAGING THE SUPPLY BASE Purchasing and supply strategy and policies Evaluation and selection of suppliers