Supply Chain: Supplier Selection & Performance Management

Summary

本次网络研讨会由Clive Stewart主持，他是Invest Northern Ireland供应链韧性与发展团队的领导者。会议旨在探讨供应商选择和绩效管理的重要性，以及这些如何帮助企业。Brian Durnin和Ian Taylor等同事共同参与，介绍了如何基于价格、价值、质量、可靠性、响应性和灵活性等关键标准来选择供应商。讨论了供应商资格认证作为风险评估工具的重要性，以及如何通过现场审计、供应商问卷、质量协议、认证、首件检验和供应商计分卡等方法来评估供应商。此外，还强调了与供应商建立强有力的服务和沟通的重要性，并提供了如何实施绩效管理计分卡的建议。最后，提供了关于如何联系并获取Invest Northern Ireland供应链支持服务的信息。

Takeaways

• 📈 **供应链的重要性**：供应商选择和绩效管理对企业至关重要，可以帮助企业提高竞争力和供应链的弹性。
• 🔍 **供应商选择标准**：除了价格，还应考虑性价比、质量、可靠性、响应性和灵活性等因素。
• 💰 **性价比与成本**：最便宜的解决方案不一定是最佳选择，最佳性价比可能来自非最低价的供应商。
• 📊 **供应商资格认证**：作为风险评估工具，确保供应商能够持续提供符合质量标准和合同要求的材料和服务。
• 📝 **供应商评估方法**：包括现场审计、问卷调查、质量协议、认证、首次产品检查和供应商计分卡。
• 🤝 **供应商关系管理**：强调沟通的重要性，通过计分卡和其他工具与供应商建立强有力的服务和沟通关系。
• 💼 **财务稳定性考量**：评估供应商的财务稳定性，确保他们能够长期支持业务，降低风险。
• 📉 **供应商数量优化**：尽量减少供应商数量以简化管理流程，但也要考虑到供应商的多样性和控制力。
• 📋 **服务水平协议**：与供应商建立明确的服务水平协议，详细列出服务要求、责任分配和性能指标。
• 🔄 **持续改进**：通过定期审查和更新供应商计分卡，持续监控和改进供应商绩效。
• ℹ️ **获取支持**：Invest Northern Ireland 提供供应链支持服务，帮助企业开发供应链功能，增强价值，降低风险。

Q & A

在供应商选择和绩效管理方面，Invest Northern Ireland提供了哪些服务？

Invest Northern Ireland提供了一个免费的服务，旨在帮助企业开发其供应链功能，增强价值，降低风险，并提高竞争力。他们采用三阶段方法：范围确定、交付和支持。首先，他们与企业合作了解业务和供应链中面临的关键问题区域；其次，帮助构建计划来解决这些问题；最后，提供资金支持关键的供应链工作者来推动这些改进。

在供应商选择过程中，除了价格之外，还应考虑哪些关键因素？

除了价格，还应考虑价值、质量、可靠性、响应性和灵活性。供应商的财务稳定性也是一个重要因素，可以通过信用检查来确认。此外，应考虑供应商的数量，理想情况下是尽可能少，以便更好地控制供应商并减少企业内部的官僚负担。

供应商资格认证的目的是什么？

供应商资格认证的目的是作为一种风险评估工具，提供适当的信心水平，确保供应商、供应商和承包商能够持续提供符合质量标准和合同以及监管要求的材料、组件和服务。

如何通过供应商得分卡来管理供应商？

供应商得分卡是一套预先设定的目标，用于衡量供应商的表现。它允许定期跟踪供应商在某些关键类别（如质量、成本或交付）的表现，并与供应商公平、准确地进行反馈。得分卡是与供应商有效沟通的平台，可以帮助管理改进措施。

如果我已经与供应商开展业务，如何引入绩效管理得分卡？

首先，与供应商进行对话，解释引入得分卡的原因，确保双方在同一页面上。然后，确定关键绩效指标（KPIs），并围绕这些指标设定一些度量标准。这些KPIs应该是对你的业务有意义的，并且是合理的。

如何确定新供应商是否具有满足我的增长目标所需的能力？

在评估阶段，了解供应商的生产或供应能力，包括他们如何处理供应或需求的波动。不要仅仅接受供应商的话，寻找他们实际能力的硬证据。检查他们的资源，包括直接员工、支持员工、材料、设备存储等。了解他们是否有备用计划，例如其他设施或备用供应商。

供应商在挑选阶段如何展示社会价值？

供应商可以通过多种方式展示社会价值，例如利用本地供应基地，从而对当地经济产生溢出效应；提供良好的工作条件和确保员工福祉；以及展示其在环境可持续性、社会责任和道德行为方面的承诺。这些因素可以纳入供应商得分卡中进行评估。

作为小型企业，如何处理来自大型供应商的供应链问题？

小型企业应该寻找恢复权力的方法，比如寻找替代供应商、协商更好的服务水平协议，或者通过网络和同行增加订单规模以获得更多议价能力。同时，保持与供应商的开放和诚实对话，讨论成本增加和延误交付等问题。

如何获取Invest NI供应链支持服务？

有三种主要方式可以获取Invest NI的供应链支持服务：1) 在Invest NI网站上搜索供应链并填写兴趣表达表；2) 如果是Invest NI的客户，可以直接与客户执行官联系；3) 通过电子邮件联系investni.com上的供应链查询邮箱。

供应商得分卡是否应该公开透明，以便在公司内部进行沟通？

是的，供应商得分卡应该是一个活文档，用于帮助公司与供应商之间的业务运行。它应该定期审查，以便作为业务运行的晴雨表，但不需要每天都查看。建议每季度审查一次，并在发现问题时与供应商一起制定纠正计划。

在供应商选择过程中，如何平衡价格和质量的关系？

在供应商选择过程中，虽然价格是一个自然的关注点，但不应只关注最低价格。最佳的价值通常来自于不仅价格合理，而且能够提供一致的高质量、可靠性和灵活性的供应商。因此，在选择时要考虑整体价值，而不仅仅是单价。

如何使用供应商得分卡来评估供应商的财务稳定性？

供应商得分卡可以包括财务稳定性作为关键绩效指标之一。这可以通过设定目标，如“劣质成本”必须低于特定金额，或者不合格率不得超过特定百分比等量化目标来实现。通过定期审查这些指标，可以评估供应商的财务健康状况。

Outlines

00:00

😀 欢迎与介绍

Clive Stewart代表Invest Northern Ireland的供应链、韧性和发展团队欢迎参与者加入供应商选择和绩效管理的网络研讨会。他介绍了团队提供的免费服务，并概述了网络研讨会的目的，即探讨供应商选择和绩效管理的重要性及其对业务的帮助。此外，还介绍了其他同事，包括Brian Durnin和Ian Taylor，他们将共同呈现材料。

05:04

📈 供应商选择与绩效管理

Brian Durnin和团队强调了供应商选择的重要性，包括价格、价值、质量、可靠性、响应性和灵活性等因素。他们提出了一个三阶段的方法：范围确定、交付和支持，旨在帮助企业理解供应链问题并制定改进计划。此外，还介绍了如何通过财务稳定性和供应商数量优化来降低风险，并强调了沟通的重要性。

10:04

🛠️ 供应商资格认证

供应商资格认证被视为风险评估工具，目的是确保供应商能够持续提供符合质量标准和合同要求的材料和服务。讨论了六种资格认证方法，包括现场审计、供应商问卷、质量协议、认证、批准和供应商记分卡，以降低与供应商合作的业务风险。

15:05

📋 供应商记分卡的运用

供应商记分卡被视为管理供应商和评估未来供应商的工具。记分卡应包含可量化的目标，如成本、不合格率或废品价值，并定期更新。通过记分卡，企业可以监控供应商在质量、成本或交付等方面的表现，并与供应商进行有效沟通。

20:06

🤝 供应商关系与反馈

强调了与供应商建立清晰、公平和定期沟通的重要性。记分卡不应被用作打压供应商的工具，而应作为改善关系和提高业务效率的手段。Invest Northern Ireland提供帮助，包括开发适合企业的记分卡、提供供应链韧性和发展框架计划的指导。

25:06

📝 供应商协议与记分卡实施

讨论了如何向现有供应商引入绩效管理记分卡，强调了与供应商进行沟通、确定关键绩效指标（KPIs）、并围绕这些指标制定合理测量标准的重要性。同时，提到了评估新供应商是否具有满足业务增长目标所需能力的步骤。

30:07

🌐 在线记分卡与供应链支持服务

提到了可以定制的在线记分卡，并强调了与供应商建立良好关系的重要性。讨论了如何通过Invest Northern Ireland的供应链支持服务获得帮助，包括通过在线表单、联系客户执行官或发送电子邮件。最后，提醒参与者网络研讨会将发布在网站上，并感谢所有人的参与。

Keywords

💡供应链

供应链指的是产品从原材料获取到最终用户手中的整个流程，包括生产、分配、销售等多个环节。在视频中，供应链是讨论的核心，强调了供应链管理对于企业竞争力的重要性，以及如何通过供应链的优化来增强价值、降低风险。

💡供应商选择

供应商选择是企业采购过程中的一个关键步骤，涉及评估和挑选合适的供应商以确保产品和服务的质量。视频中提到，除了价格之外，价值、质量、可靠性和响应性也是选择供应商时需要考虑的关键因素。

💡供应商绩效管理

供应商绩效管理是指监控和评估供应商在合同期内的表现，确保他们达到既定的质量和服务标准。视频中强调了绩效管理对于提高供应链效率和企业竞争力的作用，以及如何通过绩效指标来衡量供应商的表现。

💡价值

在供应链管理中，价值通常指的是以合理的成本获得最佳的产品和服务。视频中提到，在供应商选择过程中，价值是一个重要的考虑因素，它不仅仅关乎价格，还包括了质量、可靠性和一致性。

💡风险管理

风险管理是识别、评估和采取措施减轻潜在风险的过程。在视频中，风险管理被提及为供应商选择和绩效管理的一部分，目的是确保供应商能够持续提供符合标准的产品和服务，同时减少业务中断的风险。

💡财务稳定性

财务稳定性指的是供应商的财务状况，包括现金流和偿债能力。视频中强调了在选择供应商时考虑其财务稳定性的重要性，因为这关系到供应商是否能够长期支持业务需求。

💡沟通

沟通在供应链管理中扮演着至关重要的角色，它有助于建立和维护良好的供应商关系。视频中提到，清晰的沟通可以推动良好的行为，支持与供应商的正面互动。

💡供应商资格认证

供应商资格认证是一个评估工具，用于确定供应商是否能够持续提供符合质量标准和合同要求的材料或服务。视频中讨论了通过多种方法来认证供应商，如现场审计、问卷调查和质量协议等。

💡供应商打分卡

供应商打分卡是一种管理工具，用于设定和跟踪供应商的绩效指标。视频中提到，打分卡可以量化目标，如成本、不合格品率等，帮助企业监控供应商的表现，并在必要时采取行动。

💡关键绩效指标（KPI）

关键绩效指标是衡量组织、团队或个人在实现目标方面表现的量化指标。在视频中，KPI被用来衡量供应商的表现，如交付质量、价格和交货时间等，以确保供应商与企业目标一致。

💡服务水平协议

服务水平协议（SLA）是一份正式文档，详细说明了服务提供者承诺提供的服务水平。视频中提到，SLA可以帮助明确双方的期望，确保供应商了解并满足企业的具体要求。

Highlights

克里夫·斯图尔特（Clive Stewart）领导的供应链韧性与发展团队为企业提供免费服务，旨在帮助企业开发供应链功能，增强价值，降低风险并提高竞争力。

供应商选择和绩效管理对企业至关重要，可以帮助企业更好地管理供应链。

供应商选择过程中，除了价格外，还需要考虑价值、质量、可靠性、响应性和灵活性等因素。

最佳价值并非总是最便宜的解决方案，应关注供应商的长期一致性和响应性。

供应商资格认证可以作为风险评估工具，确保供应商能够持续提供符合质量标准和合同要求的材料和服务。

供应商打分卡是管理供应商和评估未来供应商的有效方法，应包含可量化的目标。

供应商打分卡应作为活文档定期审查，以监控供应商的绩效。

供应商打分卡应简单易读，对业务多个部门有用，并定期更新。

供应商选择和绩效管理中，企业的责任需要明确，确保与供应商的承诺得到履行。

Invest Northern Ireland 提供建议和帮助，帮助企业构建内部技能，学习工具和技术，并检查结果。

供应链韧性与发展框架计划提供了一个清单，涵盖风险管理、风险缓解、库存管理和供应链管理等关键领域。

对于拥有400多家供应商的中小型企业，不需要为每个供应商都建立打分卡，应专注于最关键的供应商。

供应商资格认证包括现场审计、供应商问卷、质量协议、认证、批准和首件检验等方法。

供应商打分卡应包含关键绩效指标（KPIs），并且应与供应商就这些指标达成一致。

供应商打分卡的拥有者应该是一个人，但需要其他部门提供数据，并且建议每季度审查一次。

服务水平协议（SLA）是客户与供应商之间的有约束力的合同，应简单明了，便于理解和执行。

在线可获得定制化的供应商打分卡模板，但应根据企业特定需求进行定制。

对于依赖大型供应商的小企业，建议寻找替代供应商或组件，或通过增加订单规模来增强议价能力。

供应商在选拔阶段可以通过展示其对当地经济的贡献、工作条件、道德行为和绿色资质来展示社会价值。

Transcripts

Good morning everyone, and welcome to today's webinar on Supplier Selection and

Performance Management. My name is Clive Stewart, and I lead the Supply Chain

Resilience and Development team at Invest Northern Ireland. We're an experienced

team of industry professionals who provide a free service to companies, and further

details will be provided in the presentation.

I'm joined today by my colleagues Brian Durnin and Ian Taylor, who will be

presenting the material.

This is part of a series of webinars that we're currently running,

and today's webinar will give you some insight into the importance of supplier

selection and performance management, and how it can help your business. We will now

go through the presentation, and there'll be a Q and A session afterwards.

(Start of presentation 01.16) Today, we're going to cover the basics of supplier

selection and how you might want to manage their performance.

My name is Brian Durnin.

My name is Enda McKeever.

And my name is Ian Taylor.

And we're part of a team of experienced supply chain professionals offering a free

service to eligible companies. And what do we do? Our aim is to help businesses

develop their supply chain function, enhance value, reduce risk and supply

chain to improve competitiveness. We offer a three-stage approach-, scoping, delivery

and support. And step one, we work with you to understand your businesses and the

key problem areas you're facing within the supply chain. In step two, we help you

build plans to address these areas. These could be supply chain resilience,

capacity, opportunities, assessments and even your supply chain strategy

development. And step three is an opportunity to help you fund a key supply

chain worker to help drive forward these improvements.

This webinar will cover supply selection, and we'll speak of the qualifying of

suppliers.

We'll mention scorecard, some information on performance metrics critical to how we

view our suppliers, and then deal with some next steps and who to contact,

finally.

In terms of the supplier selection, some of the criteria that's critical for that

selection process were very much focused on price, that's a natural, but other

things that are key considerations-, value for money, the quality that we receive and

the-, the consistency of that, reliability of-, of that-, that product that's

supplied, how responsive is your supplier and their flexibility in responding to the

demands of your business.

So, in respect to the supplier selection, we quite often focus very much on value

for money, but the key consideration of that is-, is-, you know, clearly

affordability. However, the cheap solution is not necessarily the best solution, and

the best value for money can quite often be the guy that's not-, not the cheapest,

so that-, that-, that's something to be concerned about as you make that

selection. Quality and reliability are clearly areas that,

for the long term, you need to have a significant amount of consistency from

your suppliers. Speed and flexibility, as your business responds to the customer

demands, you want your-, your suppliers to be as flexible as you are, so that's

something in terms of the relationship that you have with those suppliers. Are

they responsive? Are they in tune with their business?

From the point of view of a strong service and clear communication, we know that

communication drives good behaviours, supports good behaviours with suppliers.

That's something that, as we talk later in the webinar about the scorecard-, and that

relationship? Absolutely critical to keep that dialogue going on a continuous basis,

how they perform. Financially stable-, are these suppliers that you're using, have

they got a good, strong cash flow? Are they able to support your business in the

long term, or is there a danger, is there risk there? That's something that a credit

check will help reassure you. And how many suppliers do you need? I guess the answer

to that is as few as possible because that puts a burden on the bureaucracy within

your business. But carefully targeting groups could have several benefits, and it

will be easier to control your suppliers.

So, why do we want to qualify our suppliers? So, supplier qualification can

be seen as a risk assessment tool, it can provide an appropriate level of confidence

that suppliers, vendors and contractors are able to consistently supply quality

materials, components and services, and compliance with your contract and also

with regulatory requirements. The goal of qualifying suppliers is the certain-, that

they're going to provide you with the goods and services that consistently meet

your quality standards. And when a supplier may promise that they can deliver

to your expectations, the reality could be quite different. And here you'll hear the

word, 'consistently.' Consistently supplying the product to you, on time,

every time, right the first time. To be sure that you're getting what you're

paying for, we're going to show you the six ways to qualify a supplier. Qualifying

your suppliers will also you to de-risk your business with your supplier.

So, what are we looking for in a supplier? Well, there's ownership.

Not having to micromanage your supplier, that they're looking after the service,

the transportation, the logistics and the quality when you get along with running

your own business.

Product quality-,

right the first time, every time. What do other customers say about them?

Product quality, as we know, is a major factor when we're selecting a supplier.

Supplier capabilities-,

can they do what they say they can do, for the price that you've agreed?

Consistency-,

on time, every time. No having to micromanage your supplier from your office

during your daily working day.

Risk-,

and minimise the risk, it's a critical factor to consider.

And recognise the importance of identifying and

mitigating the potential risks in a supplier partnership.

So to be sure we're getting what we're paying for, there are six useful methods

to qualify a supplier.

On-site supplier audits, which may be a bit-, a little bit difficult in the

current climate. Supplier questionnaires.

Quality agreements.

Certifications, approvals, ISO 9000, 9001, YASA, NADCAP, there may be

treatments approvals that you may need to audit, and first article inspections. And

lastly number 6, quite important, supplier scorecards.

A supplier qualification audit ensures you can gauge a supplier's strengths early

enough before committing to working with them, and in turn you can rest assured

that your business will be in safe hands.

On-site supplier audits probably won't let their sway (ph 08.21)-, determine their

quality of services, their goods.

An on-site audit of their process is a documentation.

Look at their rate, can they meet the demand? Is their whole process understood?

Is it capable? Their work in progress, the inventory around their site. Have they got

the capacity? Have they got the direct and the indirect manpower

capable of your needs? Their machining, their equipment,

is it capable? Have they got enough capacity? Have they got the right tooling?

Is there enough space in the factory, and what facilities they may have?

Additionally, an audit will help you and the supplier identify areas of

improvement. So, if you've got that customer-supplier relationship, you can

build on it because you're building on areas of improvement, and they want to

improve so that you're going to continue to be buying from them. You're going to

build that relationship, build that rapport, and create a risk-sharing

partnership relationship.

Although on-site audits are probably one of the best methods,

it is quite costly, it can be timely. However-,

we can use third parties to do our auditing in other countries, we can't use

desktop audits,

third-party independent audits also.

Supplier questionnaires-,

so, I simply use them as a request for information, which is evaluating potential

suppliers. It's an excellent system by which to measure how well your potential

supplier meets your legal, your financial, your quality and your operational needs.

Questions can range from quality system practices, capabilities,

tuning,

products, anything that they're going to provide, that goes in the product, that's

going to affect your contract with them.

Yes, it's typically reserved for less critical suppliers, however it's a very

effective way to show qualification. You can gather financial information, and that

will indicate if they have the appropriate resources and financial stability to meet

your contract requirements.

Number three, supplier contracts and agreements.

Companies opt to create quality or service-level agreements that will detail

agreed requirements. For example, statement of objects,

scope of services to be offered and covered,

service provider responsibilities, customer responsibilities,

performance metrics, response time, resolution time,

and perhaps penalties for contracts or breach of exclusions.

And also, if you have that document, keep that document

in place for the following year, or whenever the contract comes up for

renewal, or for renegotiation.

Number four,

ISO certification.

As I spoke about earlier, it can be sometimes difficult

to send out your team, your employees, away abroad, the Far East, Europe, North

America, during the current climate, also due to work commitments.

There are independent certified bodies worldwide, certified to ISO, who can carry

out an audit on your behalf against your criteria.

It's an efficient use of the ISO system

and can help you choose which supplier that you ultimately want to work with.

Number five, first article inspections.

While the first article inspections may not suffice on their own, it's certainly a

starting point and it's a good way to determine the quality of the goods that

are going to be delivered to your company. You can work very closely with your

supplier, send in your quality team, send in your engineering team, and work

hand-in-glove with them and make it a success.

A good first article plan, agreed upfront with your supplier, is a great place to

start.

Put the targets in, put your goals in, put the estimate and completion dates in,

put the owner's actionees onto the plan and review it regularly. Weekly, yearly,

whenever you determine may be critical.

Number 6, supplier scorecards.

Using a supplier scorecard between yourself and your supplier will be a good

way to manage them, and to quality future suppliers. A supplier scorecard is a set

of goals agreed upfront for the supplier.

A set-, you're setting out your stall early.

Discuss why you want to have this in place and the benefits that it'll bring to both

parties so there'll be no surprises either on you or on your supplier.

Looking at some of the supplier scorecards, I believe that some companies

may think it's a lot of work, a lot of effort, but if you divide that amongst

your natural team, amongst your quality team, your engineering team, your

operations, your accounting, your methods, your logics, it can be nothing more than

five minutes each, that would produce a one-page document that would provide

invaluable for your-, for your company.

And remember, supplier scorecards should have quantifiable goals. For example, Cost

of Poor Quality must be less than, say, for example, a target of £100,000.

Or the failure rate can be no more than 3.5 percent, or the scrap value (inaudible

14.38) can be no more than 2.5 percent. So that you're measuring,

you can take action and then you can mitigate if it happens again, if it's

going to happen, further in the year.

Once you've decided to use a scorecard, the next step is to think about the key

performance indicators, or KPIs, that you want to include. Every business is unique,

and it's important that you choose the ones that are relevant and work for you.

Delivery, quality and price tend to be the starting point for most businesses.

A good way to think of a scorecard is that it's a report card for your supplier. It

allows you to monitor how your supplier is performing over time, and you can set this

time-frame. With a scorecard, you want to be looking at how your supplier performs

in certain categories which are important to you. These could be quality, cost, or

delivery.

Set the expectations you and your supplier have agreed to at the performance level.

You can now regularly track performance against this performance level. If you're

giving (ph 15.53) the ability to spot if things are beginning to slip, it's

important that you have meaningful metrics that make sense for you and for your

business.

Scorecards are a good platform for effective communication with your

supplier. When you have agreed performance metric standards, and you have measured

accurately and fairly against these, your review is based on good data.

Also, your supplier may be overall quite good, but not be particularly strong in

one area. The scorecard can help you manage an improvement initiative with

them.

Here we see an example of what may be more of a sophisticated scorecard. Things worth

noting on this are that it is split into categories, in this case price and

quality. The owner then has placed weighting on how important these are to

their business. In each category, there is a measurable item that can be scored, and

these have a sub-weighting. A traffic light system has been used to show

visually if performance is on target, within spec, as it were, or below the

expected standard.

An overall score, in this case of 85, is calculated, and it's clear and easy to

see.

If the last scorecard scared you off, then this one may put you back at ease. This is

a straightforward scorecard where the owner is interested in only three things,

the quality received, the average delay in receiving material and the percentage of

units failing inspection. They're charted, how these metrics perform, on a monthly

basis.

And we can help develop scorecards that work for your business.

Most companies would agree that a supplier scorecard should address a minimum of a

few things. What're the most challenging issues that you have with your supplier?

Tending towards reliability, lead times and willingness to meet specific

guidelines is what's needed.

So, for your scorecard to be effective, it should be easy to read, be useful for

several departments in your business, and regularly updated. The scorecard is a

mechanism by which you communicate performance throughout the factory and

back again with your supplier.

So for supplier selection and performance management, your responsibilities need to

be set out clearly. You have to live up to your commitments with your supplier,

payment on time, order-, give them plenty of lead time in this, measure your

supplier performance fairly and accurately, and feedback regularly with

them. A scorecard should not be used as a tool to beat up your supplier, but to

generally have a better relationship going forward. And it's important to foster the

relationship so that there aren't any difficulties with it.

So, how can you implement some of these things we've discussed today? Well, come

and talk to Invest Northern Ireland, get advice that will help you to decide where

to start. We can help you build your in-house skills, learn the tools and

techniques, apply them and check the results.

The Supply Chain Resilience and Development Framework programme has a

checklist that covers four key things. Completing this could help you understand

areas where you need help. Risk management, risk mitigation, inventory

management, and supply chain management. (End of presentation 19.34)

Thank you. I am now joined by Brian and Ian for the Q and A session. And just a

reminder that there's an opportunity in the chatbox, for anybody that hasn't

submitted a question yet, to actually drop them in. So, we're starting to see some

questions coming in, and

the first question that's arrived in and, I think, very relevant is, 'I'm an SME

with over 400 suppliers. Do I need a scorecard for everyone?' Is the first part

of the question, and the second part is, 'Also, how do I qualify them?' So, Brian,

do you want to start?

Yes, yes, thanks for that. 400

suppliers-, the short answer is absolutely not, no. You do not need a scorecard for

400 suppliers. To do that, it would cripple your company in bureaucracy and

there's really no value in doing that. The best thing that you can do there is look

at your suppliers. You need to figure out which ones are the most valuable to you,

which ones are really bringing your business forward, that they're key for you

to work with and that you have a good relationship with. When you identify those

ones, then set about doing a supply-, sorry, a scorecard with them, and then you

start having a conversation with them about what you want to have on that

scorecard, how you want to measure,

how you're going to report on it, and then you start building a relationship with

them. But no, you-, you could not have, possibly, 400 scorecards. That would be

your business, just filling in scorecards, to do that. So no, it'd be nuts (ph 21.03)

if you could do that.

And the second part of that one, then, Clive? Sorry?

It's, 'How do I qualify them?'

Okay. So, once you have identified a supplier that you want to work with, it's

important that you identify what they supply to you and what's key in doing

that. And once you have that list of things that you want to do, you then set

about figuring out, 'Well, how-, what am I going to measure about this? What is the

criteria?' If it's going to be, say, on-time delivery-, so, what's an

acceptable on-time delivery? What is not acceptable on-time delivery? That

conversation starts, then, with your supplier. And once you agree, 'Look,

listen. One day's not too bad. Two days? I'm starting to worry about it. If you're

a week late, we've got a problem', you now have your green light, traffic light

situation here, in how you would qualify them. So, 'One day is okay, you're green.

Two days, you're yellow, we need to do a bit of work on this. A week late, we're

red, we need to take remedial actions on this.' So you'll list the important things

to you, you'll put a criteria around them, and you measure them and you review them

regularly. And that's how you would do that well. Has that answered your

question?

Yeah, thank-, thank you, Brian. I'm not sure if Ian has anything to add to that?

Hi, good morning. Apologies for not being on-, on camera, firstly. Maybe that's a

good thing.

Again, just following on-, on what Brian had sad, I-, I-, I would never try to

qualify 400 suppliers. Obviously, cost implications would be huge, the amount of

resources you would take from your company would be-, would be quite large. The

logistics of it all, depending on where your suppliers are located in the-, in the

world,

would be expensive and taking your team off-site, away from your core business.

So, firstly, I-, I-, I would look at the critical suppliers of my business and I'd

prioritise them first. And obviously, as I said, you know, the-, the-, the best way

to do it would be an on-site audit. Go and see what they do, what do they offer,

check their quality,

see what other customers say about them. You know, have they got the ability to

provide you with quality services and goods consistently? That's what it-,

that's what it's about, 'consistently', as Brian had-, had alluded to. If you're

going to do that, look at desktop audits, questionnaires, and

quality agreements.

A realistic first article plan, not something that the-, your supplier can-,

concoct and then you buy off the following day. It's got to be

realistic, agreed upfront, target ACD owners and reviewed regularly so there are

no surprises.

I'm sorry, lastly, just because a supplier says they can do it, it-, it doesn't

always mean that. You know, there's many steps within the manufacturing

and distribution chain today that we are outsourcing, and that means they're

outside of our direct control, but we remain responsible when it comes to

compliance and quality assurance.

Okay. Thank you, yep. And the second question that's come in is related to

scorecards, again,

'Who should own the scorecard in a company? And how often should you set up

reviews?'

I'll-,

I'll take that one, Clive. So, it's important that you should have one person

who's responsible for completing the scorecard and having it current. But

here's the thing on this, scorecards are really good for cross-communication within

the company. So if you have a large company, and you have departments such as

a-, a finance department, a quality department, if you have a logistics

department, it would be up to the owners of each of those departments to supply the

data to the owner of the scorecard. And they would collect that information, kind

of-, maybe it's reviewed then by the Board. So if you've got a large

organisation, each department owes their data back to the person who owns it, but

you need one person who does it. If you're a small SME, and you run it, then you are

that department, you are everything. You're the van driver, you are the

account, you are everything, so you fill in your own scorecard and do that. And,

therefore, that might dictate the size of the scorecard and the complexity of it to

do that. So, once you have a scorecard-, here's an important thing in this. The

scorecard is to help you run your business with your suppliers, so you-, just don't

fill it in, and file it away, and you never look at it again. It should be a

living document that you review so that it's a barometer of how your business is

going with that supplier. But that having said, you don't want to be looking at it

every day because that's too much movement, so my recommendation is that you

look at this every quarter. Every three months will be a good enough way of going

through this. And if you identify that there is an issue, then you start working

with a corrected plan to try and reduce that. So, one owner, but data fed in from

other people, and a good rule of thumb, every quarter have a look at it.

Okay, yep. And I think-, I think, just to add Brian, what you're saying is it's very

dependant on the size and scale of the company, and the importance of that

supplier to you

will determine, I suppose, the frequency and level of effort that-, that you would

put in. The next question that-, that-, that's come in is, 'Is there a template

available for supplier agreements, as we're trying to establish agreements going

forward for our-, our suppliers?' Ian, if you want, you can take that one.

Yes, I can, Clive. Well, let me say that, you know, working with clients-,

currently, I'm speaking on behalf of the South and-, and-, and the team. Looking at

their business, and their-, and their business needs, and what some of the

issues are that we're facing today,

we can-, we can tailor a service-level agreement, it doesn't have to be anything

complex to be legal. It's a-, it's a binding contract between yourself

and your supplier, and-, and what I would emphasise there is, you know, the

importance of the relationship between you and your supplier, and bring their

supplier-,

sorry, the service-level agreement onboard.

And you can also use that

with your scorecard,

you know?

As I say, one of the things that I-, I've been speaking about when I'm out seeing

clients is some of us believe that, 'It's a complex document. We need to get the

solicitors involved.' It's not, it's-, it's far from that. You know, you want to

be running your business without having to worry,

'With this next shipment, will it come in on Friday?' or are you going to have to

call a guy, call a woman, email them, etc, etc? So on the service-level agreement,

it's what you're paying for, delivery on time, the goods are high quality, and it's

consistent, and you come to that agreement.

And one of the things I-, I like to emphasise is, when we're talking to our

suppliers, is that we give them

a forecast of this year's sales figures. You know, 'Can we forecast further out?

Can we demonstrate to them, you know, we're going to grow our business? I need

you and, you know, they need us,

because without-, without us, they won't have their business.' So share with them

your growth opportunities also and encourage them, you know, to bring that

service level agreement in.

Yeah. No, I would-, I would agree with that, Ian. I think the-, just to add to it

as well, again it depends on the size and scale of an organisation that-, that-,

that you are. But the important bit here is about having incremental steps in place

and having, you know, been able to clearly utilise, you know, a contract quality

agreement, service-level agreement, to actually help align expectations between

the customer and the supplier. And that's something, you know-, again, it's

something we can-, we can offer input into. That document is, obviously, very

clearly owned by the customer and-, and what they feel is-, is-, they need to put

emphasis on as part of their activities. But certainly, we can-, we can guide on

that.

The next question, Brian, is, 'How do I introduce a performance management

scorecard if I'm already doing business with the supplier?'

Well,

it's okay, that's a-, that's a-, that's a good question. So, you're already doing

business with the supplier and you want to introduce a scorecard? The-, the first

thing that I would advise there is that you have a conversation with the supplier

so there is no misunderstanding, that they don't think, 'Okay here, what's going on?

Is this guy trying to develop something that's going to be used as a stick to beat

me?' So you have to have a good relationship with your supplier, and

you'll tell them why you want to do that. And the reason why you want to have a

scorecard is because you want to measure performance, you want to measure how you

are, ultimately, delivering to your customer. Your suppliers have to give you

raw materials that allow you to do that, so you're trying to have continuity of

services. So that's the motivation, you have to talk about the motivation of why

you want to do that to do it, but then what you have to do is agree on your key

performance indicators, 'What is it that I want to measure with this-, with this

supplier?' And the important thing here is don't lose sight of things. Make it

simple, make it straightforward, 'What is it I want to make sure happens in my

company?' And how can I measure it, and is it reasonable?' When you have identified

these key performance indications, you'll then agree with your supplier, 'What are

the measurements we put around these?', But the important thing is that you start

looking and saying, 'Right, what's really important to me? Is it delivery? Is it

quality? Is it price? Is it flexibility?' And one of the reasons why you might want

to bring a scorecard in is that-, has the company that you're working with got the

ability to grow with you? If you're going to become innovative and creative, do they

have the skill sets to match you along the way? So, you may put innovation into your

scorecard.

In our society, we're looking at green, recyclable, energy-saving, or what have

you, you may put that into your scorecard. Your customers, in turn, may be asking you

questions about, 'How are you running your business? Is it ethical? Are you doing

thins right?', so you may want to introduce those to your scorecard as well.

And the other thing I would say about the scorecard is that you then can talk to

your customers and tell them, 'I'll look at these metrics. I follow these, this is

the performance that I do in this', so this is how you would do that. So, first

of all, have a conversation, make sure that you're both on the same page. Then

identify your KPIs, your key performance indicators, only do ones that are sensible

and reasonable to you,

then put some metrics around them and measure them regularly. And we-, we can

help you do that. We can build that scorecard with you, and we can help you

understand your KPIVs and we can go through those things. So, yeah, it's

always worth giving us a call and we can talk you through those things.

Yep, that's good. Ian, the next-, the next question is on capacity, and a-, a very-,

a very pertinent area at the minute as we work with companies. You know, there've

been companies that have been going through the, sort of, the-, I would call

it the downturn and the upturn in terms of all the things that have been going on.

But the specific question is, 'What steps can I take to determine if my new supplier

has the required capacity to meet my growth targets?'

Okay.

Well,

going back to when you're having your talk with your supplier, during the evaluation

stage,

it's important that you understand their production or, you know, supply capacity,

and also including that-, how they're going to deal with fluctuations in supply

or-, or-, or demand. So, you know, make sure you have that visible and-, and bring

that to the table.

You know, it's often-, it's quite often to-, for a supplier to, shall we say,

misrepresent their competence just to get the work, claiming that they have the-,

the capabilities and meet your organisational needs, and often they're

not. Once we're into the, sort of, the new contract, then things start to, maybe,

fall apart, the quality, delivery, or on-time payments. So we shouldn't take

their word at face value, look for hard evidence that they're actually competent.

Check that competence,

assess their capabilities compared to a (inaudible 33.56) company,

and if possible get them to demonstrate that. You know, that's-, no matter what it

may be. It could be a print, it could be a component, it could be an image you're

going to put on yourself and sell, you know? Get them to send you a sample or go

on-site. Look at their resources, have they get enough direct staff to meet the

needs? Have they got support staff?

Materials? Equipment storage?

You know, looking at-,

have the people have got-, do they-, do they have the right skills, you know, for

what-, for what you need, to meet your requirements?

One of the things in my previous life that we would have looked at was, you know,

your supply

readiness plans, rare readiness plans. So, in other words, you give your year's sales

figures and next year's forecast, etc.

If-, if you predict a growth or, indeed, you know, a bit of fluctuation coming

down, you know, talk with your-, with your supplier how they're going to manage that.

Bear in mind also that you're not the only client, that there are other clients

there. So, always look for the hard evidence, you know? If it's a machine,

how-, how much that machine is being used during the week with your product. If it's

a printer, a special printer,

again,

the same. You know, maybe three or four clients are all coming off that one

machine, that one printer. 'Has it got the capacity to deal with all of us?'

One of the other things is, you know, if they run out of capacity, what's their

plan B? Have they got another facility that they can

avail of without any cost implications to yourself? Have they got

another supplier that they can go to? Where's the evidence? Demonstrate to

yourself.

So,

one other thing is, you know, if there are

special processes involved,

special machines,

if they were to break down, what's their contingency?

You know, I'm thinking of, maybe, perhaps,

a five, six-axis machine. They've only got one on the site. You know, have they got a

total preventative maintenance plan? That that machine is being regularly checked,

they've got spare parts for it so, you know, that takes the worry away from you

and de-risks your business.

So, I think, maybe, that may have answered that.

Yes, Ian. I would-, I would agree, I think, that-, that-, the-, the comment

there is-, is very much-, is that it's that due diligence in working with your

supplier and understanding the risks, and then what are the steps to mitigate

against those.

In terms of the capacity, I guess it is-, as we speak to companies, we see more of

them starting to look at putting some sort of capacity plans in place and reviewing

those with suppliers. And indeed, I'd say our previous webinar actually talked about

some of the material on-, on, sort of, looking at the capacity length (ph 37.17)

for the forecasting activities. But that, again, is something that we're, you know,

happy to have conversations with companies on in terms of it. The-, the next one

that-, that pops up, Brian, here is, 'Does a-, does an online scorecard exist that

you can customise to your company?'

Yeah. I mean, in this day of-, of the internet, you can go and pick anything up

from the internet and you can fill that out. I would guard slightly against that

because you-, you really want to not just pick something off the internet and fill

it in and go with it. This is going to be something that guides your business. So,

they're relatively straightforward to build. They're easy to build and we build

them all the time, and we will absolutely help you build them. The important thing

is you need to know what you're building. Which are the categories which are

important to you? What are the little items underneath it? In the example we

showed earlier on we had a prices category, but in that we also put items

such as, you know, were they competitive in the market? Did the invoices arrive on

time? What were the payment terms on it? How long did it take to turn around a

quote? So those are things that are important to you, and what I do when I'm

dealing with a company and we're building the support card, we use language that

they understand for their company, we use the items that are important to them under

the categories that we've got, and we can build (ph 38.37) with you. So the answer

is yes, you can go and pick up a template, and we have templates within Invest, but

we can tailor it and we can build it. And it should be unique to you, that's what I

would suggest.

Yeah, I was going to say, you know, the-, the particular person that asked that

question just reached out to us, and we can-, we can have that discussion because

we have-, we have different samples of templates.

The-, the next question is quite an interesting one, and I'm sure a-, a

number-, you know, a number of businesses on the call can relate to this, but, 'I'm

a small business and have supply chain issue from a much larger-, from a larger

company. I'm nervous about addressing these as I'm very dependent on that

particular-, on the supplier, and tend to try to absorb or pass along any of the

associated costs to my customers. What advice would you have for me?'

Do

you want me to take that one? I-, I absolutely recognise the signature, this

is-, I can understand this entirely.

So, you know, you're an SME, you're dealing with a company, you're feeling

really, kind of, threatened, you, kind of, feel vulnerable. You don't want to

actually rock the boat because, 'Okay. I might lose the business with them, so I'm

basically tolerating some of the things that have happened and passed them along

to my customers' and what have you. That is short term, that you're vulnerable and

you're always doing it. You want to run your own business, so what you have to do

here is you've got to figure out, 'How do I take power back?' I know it's easy to

say, but the strategy is, 'How do I take power back to me, and how am I going to do

this?' So, if you're really dependent on someone, the chances are, you know,

they're not that-, they don't care about you that much, so you may have an issue.

So what you've got to do is you've got to mitigate yourself into a position where

you're maybe getting an alternative supplier, or you're looking at a

substitute component, or you're looking to use your network to figure out, 'Can we

get a consortium of people to increase our order size, to give us a little bit more

power? What're my peers doing? What're my networks doing?' And once you try to do

that, you need to look for an alternative supplier, you need to try and figure out,

'If I'm stuck here, can I negotiate a better service-level agreement? What kind

of contracts can I put in place for this?' You know, 'How did I get-' the other thing

I would say is to get advice, if people can come in and give you advice on how you

do this. It is a-, it is a situation that does exist, where you're worried about

where you are. The goal, I would say, is that you have to take power back. You have

to maybe tiptoe to do that, but you should really put that on your agenda. That

should be your action plan, 'How do I get to there?' because you have a

massive risk, the massive risk is that you're dependent on a major supplier. And

if something happens? You have no resilience, you've nothing to do. So you

have to build up your resilience, bring back the power and try and mitigate the

risk. And you do that by what I've just talked about before. I would also talk to

your network, talk to your peers, talk to other people in your industry and see how

you can get a little bit more leverage.

Ian, do you want to add anything?

While Brian covered most things there, I'd just like to-, to add to that.

It is quite a common thing that we're-, that we've seen, and I've seen it also in

a-, in- a-, in my previous life.

You've got the information and it's-, it's factual. That, you know, could be that

prices are-, are going up. I-, I believe it's-, it's unfair of the-, for the

company to carry that financial burden, or indeed to pass it on to your customers.

You know, it'll-, it-, it wouldn't be too long before the customers realise that,

you know, they can get a better deal elsewhere, you know? So, you've got to be

careful about that, you know, your customers don't leave you and then another

one leaves, etc.

I would also look-, and-, and Brian alluded to it as well. Look at the

relationship you've got with your supplier.

When was the last time you spoke or even met pre-COVID?

Was price increases discussed? You know, did you talk about

missed deliveries? Did you talk about, you know, paying expedited charges? You know,

how good is the communication between you people?

So, for me, agree to meet, have your agenda. And-, and as Brian said, you know,

don't threaten them. Tiptoe in, have-, but have open, honest dialogue. Tell them

about your dilemma, that you're carrying that burden of the cost or you're passing

that along to your customers. You could lose your customers. If you lose your

customers, your business goes down, you're not going to buy more from him, you know?

And almost form what I-, what I deem, like, a risk-sharing partnership, you

know?

'If I grow, they grow,

and we'll have a win-win situation.' But you've got a win-win situation because

you're taking back that control. Again, that's what Brian said, so-,

Yeah, yeah. No, and I-, and I think, to me, it reinforces, Ian, as well, the, you

know-, you know, the areas Brian was talking about, earlier around scorecards.

You know, actually having-, having some sort of documented agreement between the

partners because what we don't know in this situation is whether there is a

service-level agreement in place, or whatever. But, you know, at least then

you-, you've got some more, I would say, collateral to be able to-, to work with, with the company. The-, the next question that's-,

that's arrived in is, 'What ways can suppliers demonstrate social value at the

selection stage?' And if-, if I start with that, I think that-, that this does

depend, again, on the type of contract. Social value is becoming a much more, I

suppose, increasing level of requirements, particularly in government-related

contracts, depending on which type of-, you know, sectors, they're-, they're

typically government-related contracts. I suppose some of the things to-, to start

to consider there is, you know, what's the-, you know-, in your own supply base.

You know, 'Can you demonstrate you're utilising from your local supply base so,

therefore, when I'm engaging with you you're having a knock-on or spillover

effect into the local economy?' You know, that's a key area. Other factors are

things like, you know, the-, the development of, you know, practices or,

you know, the-, the skill set that you're bringing. If this is going to be

recruiting more local people to actually support the activities that's associated

with it. Or-, or some of the key-, the key factors that-, that actually would feed

into it. I'm not sure, you know, Brian or Ian, anything else you'd like to add to

that?

Yeah, I would-, I would add to that that once you start doing business-, and the

world is changing. You know, well-being is really important,

making sure that people are-, have got good working conditions and things like

this. And if you're dealing with suppliers that are very far away, or are in

different countries, and you don't understand really what's going on because

you haven't been able to put your boots on the ground to do that, you can then-,

I'm-, I'm-, I'm a fan, obviously, of the-, of the scorecard mechanism. You can enter

just those into your scorecard, and that may be the working conditions, it may be

geopolitical conditions, whatever it may be. You can bring those things in and you

can look at how that's contributing to you. I also think that if you have

documents in place that show the ethics of your organisation, what you're trying to

do and what you value-, that it isn't all just about delivery or price, it's also

about the well-being of people, it's also about how you're dealing with the world,

it's also how your green credentials are developing, how you're working in tandem

with what the local government policies are or what the-, the strategies that

you're trying to bring in. And rightly so, your general public and your customers are

now holding you accountable to bigger things than just profitability. So you

have to look at that, you have to measure it, you have to be balanced about you

approach things to do that. And they're all factors that should be considered when

you're dealing with a new supplier, if you're trying to qualify one and you're

trying to bring one on. I know we all know how to do business, but it's more diverse

now than it used to be.

Alright, thank you. And the-, the-, the last question, obviously, on our-, on our

list is, 'How do I access the Invest NI supply chain support service?' I suppose

there are three key ways I would-, I would highlight, how you can access our service.

The first one, if you go online to Invest NI and search for supply chain you'll find

the link to our webpage, and you-, there's an expression of interest form that you

can fill in there. The-, the second one is, if you're an Invest NI customer, speak

to your client executive and they will signpost you to us. And the third one is

on the screen earlier, and we'll make sure it arrives up again just at the end, is

you can email the email link that's on here, supplychainquery at investni.com,

and we will-, we will be in touch with you. So, just-, just checking or-, yeah,

that's-, that's all the questions in terms of things. So, to-, before we finish up,

just-, we'll be posting this webinar as well on our website in the next few weeks.

I was going to say, this is actually the third in a series of webinars

that we've been running, so you'll see some of the other ones on there. We will

send out a communication to everybody just to let you know the relevant links, in

terms of what's there. So, just to wrap up, I'd like to thank, you know, Brian and

Ian for-, for their contribution today, and Enda who contributed to the

presentation as well. And thank you to everyone who joined the webinar today, and

this now concludes today's webinar. Thank you.