Purchasing & Supply Management: Supplier Selection (Part 1 - The Process)

Summary

This lecture by Professor Finn Winstram of the Rotterdam School of Management covers supplier selection within purchasing and supply management. It details the processes and criteria for supplier selection, tendering, and contracting, emphasizing the importance of developing category-specific sourcing strategies. The lecture also explores different tendering procedures and selection methods, highlighting the impact of purchasing situations and objectives. Key concepts include problem definition, criteria formulation, supplier qualification, and final selection, along with various tools and techniques used in these processes.

Takeaways

• 📚 Supplier selection is a critical process within purchasing and supply management, involving identifying, evaluating, and contracting with suppliers.
• 🔄 The tendering process follows the sourcing strategy development and results in category-specific sourcing strategies.
• ⚙️ Tendering involves a buying organization putting its needs up for bidding by different suppliers, often using competitive procedures.
• 🏆 Supplier selection criteria often include price, quality, and delivery, but other factors like sustainability and effectiveness are also considered.
• 🌍 The supplier selection process can differ based on the buying situation, such as new tasks, modified rebuys, or straight rebuys.
• 📊 The process can be divided into problem definition, criteria formulation, qualification, and final selection, with different tools used at each stage.
• 🔍 Requests for information (RFI), proposals (RFP), and quotations (RFQ) are common steps in the tendering process to gather market intelligence and assess supplier capabilities.
• 🏢 The purchasing situation and objectives influence the choice of tendering procedures and selection methods, including non-competitive purchases, informal negotiations, closed tenders, and open tenders.
• ⚖️ Criteria for supplier selection can be categorized at the supplier level, product/service level, and condition level, each with varying degrees of uncertainty and information availability.
• 🔄 The supplier selection process and criteria can vary significantly depending on the purchasing situation, such as routine items, leverage items, bottleneck items, or strategic items.

Q & A

What is the main focus of this lecture?

The main focus of the lecture is on supplier selection, which is one of the main processes within purchasing and supply management.

Who is the lecturer and what is their affiliation?

The lecturer is Finn Winstram, a professor in purchasing and supply management at the Rotterdam School of Management, Erasmus University.

What is the definition of tendering according to the lecture?

Tendering is defined as the process by which a buying organization puts up its needs for bidding by different suppliers.

What are the four major steps in the tendering and supplier selection process?

The four major steps are problem definition, criteria formulation, qualification, and choice.

What are the three main levels of supplier selection criteria?

The three main levels of criteria are supplier organization features, product or service performance, and conditions including price and delivery.

Why might a buying organization need new suppliers?

A buying organization may need new suppliers if it starts offering new products or services, if supply markets or technological conditions change, or if it needs to reconsider existing supplier relationships.

What is the difference between closed tenders and open tenders?

Closed tenders are by invitation only, whereas open tenders are open to any supplier willing to bid.

What are the three types of requests a buying organization may send to suppliers?

The three types of requests are Request for Information (RFI), Request for Proposal (RFP), and Request for Quotation (RFQ).

How does the purchasing situation affect the supplier selection process?

The purchasing situation, classified as new task, modified rebuy, or straight rebuy, affects the definition of the problem, criteria formulation, qualification, and choice steps in the supplier selection process.

What role does a category sourcing strategy play in the supplier selection process?

A category sourcing strategy helps to effectively and efficiently conduct a tendering and supplier selection process by defining objectives and criteria for each sourcing category.