SCM 371 Lecture 16: How to Buy-11_29_16-Module 3.2_Supplier Selection and Evaluation
Document Summary
Internal users submit requisitions: new product development, poor supplier performance or insufficient capacity. End of contract period: buying new equipment, conducting outsourcing analysis, reducing size of supply base. May be determined by internal and external customers. Where do you look for potential supply sources: current or preferred suppliers, organizational knowledge. Determine sourcing strategy: no single strategy will satisfy all situations, the environment changes, market conditions, user preferences, corporate objectives, reevaluate as necessary. Why would you: source from manufacturer vs. Limit suppliers in selection pool: criteria for evaluation. Financial strength: proven manufacturing or service capability, capable and supportive management, adequate facilities. Supplier visits: use of preferred, certified, or partnered suppliers. External or third-party information: domestic vs. international suppliers. At least 0. 8 if supplier sells on credit; (cash + receivables) current liabilities. Low means slow inventory or possible cash flow. Too low means supplier may be inefficient usin. Days sales outstanding = (receivables x 365) sales.
