Ray Carter discussing his 10c Model and how it is used to help with supplier selection.

Summary

This discussion explores the 10C model of supplier selection, focusing on its systematic approach to evaluating potential suppliers. Ray and Jeff delve into the model’s key elements, including competency, capacity, communication, and CSR (Corporate Social Responsibility), highlighting how these factors impact supplier evaluation. They emphasize the importance of verifying supplier claims and adapting the model based on contract risk and value. Practical examples from various industries, like construction, illustrate the model's versatility. The conversation underscores the need for due diligence and careful decision-making in supplier selection to ensure sustainable, effective outcomes.

Takeaways

• 😀 Supplier selection is a systematic, step-by-step approach to analyze and verify the resources and capabilities of potential suppliers, considering risk and value.
• 😀 High-risk, high-value contracts require a more thorough evaluation, whereas routine activities can be assessed with a lighter approach.
• 😀 The 10C model is an essential tool for supplier selection and evaluation, ensuring long-term sustainability and effectiveness in supplier relationships.
• 😀 Competency and capacity are key factors in supplier selection, ensuring that suppliers can consistently meet delivery requirements.
• 😀 Over time, the 10C model evolved from 7Cs, with new elements like CSR and culture added to reflect changes in business practices and societal expectations.
• 😀 CSR (Corporate Social Responsibility) has become increasingly important, influencing supplier selection and evaluation, particularly in light of supply chain risks and sustainability concerns.
• 😀 Certain Cs in the 10C model, such as competency, culture, and CSR, may be weighted differently depending on the sector, like construction versus services.
• 😀 In construction, financial stability (balance sheets), CSR, and competency are particularly crucial due to the nature of the work and associated risks.
• 😀 Verification of supplier information is essential to ensure accuracy, especially when dealing with high-risk contracts. It's important to ask detailed questions to validate claims.
• 😀 To ensure the integrity of the supply chain, it's vital to extend due diligence practices to subcontractors, ensuring they meet the same standards as the primary supplier.

Q & A

What is the primary focus of the 10C model of supplier selection?

The 10C model of supplier selection focuses on systematically analyzing and verifying the resources and capabilities of potential suppliers and contractors. It considers factors like risk and value to determine the appropriate approach to supplier selection, varying from in-depth analysis for high-risk/high-value contracts to a lighter touch for routine activities.

How has the role of supplier selection changed due to recent global events, such as the COVID-19 pandemic?

The COVID-19 pandemic has highlighted the importance of secure and reliable supply chains. Companies with strong supply chains and professional procurement practices fared better during the crisis. This emphasizes the need for businesses to ensure their suppliers are resilient and capable of handling disruptions.

What is the significance of CSR in the 10C model of supplier selection?

Corporate Social Responsibility (CSR) has become an important factor in the 10C model, reflecting the increasing emphasis on ethical practices in business operations. The inclusion of CSR recognizes the need for companies to ensure their suppliers meet environmental, social, and governance standards, which has become a critical evaluation criterion.

What are some of the key components of the 10C model?

The 10C model includes various components such as competency, capacity, consistency, control, culture, communications, and CSR. These elements help evaluate a supplier's ability to meet contractual obligations, manage risks, and align with the buyer’s organizational values and objectives.

Why did the 10C model evolve from 7 Cs to 10 Cs, and what was added?

The 10C model originally had seven Cs, but over time, three additional Cs were added to reflect changes in the business environment. These additions include CSR, culture, and communications, highlighting the growing importance of ethics, relationships, and effective information exchange in supplier selection.

How can the 10C model be applied beyond the supplier selection process?

The 10C model can also serve as an ongoing tool for supplier evaluation, ensuring that suppliers maintain the standards set during the initial selection process. It allows businesses to regularly assess and verify the performance and alignment of their suppliers over time.

What role does 'competency' play in supplier selection, particularly in sectors like construction?

In sectors like construction, competency is crucial because suppliers must demonstrate the ability to successfully execute complex projects. A supplier's technical expertise, experience, and proven track record are key indicators of their competency to handle large-scale and high-risk projects.

What is the importance of a supplier’s balance sheet in sectors like construction?

In the construction sector, a supplier’s balance sheet is vital because construction projects often require substantial upfront investment, with payments made in stages. A strong balance sheet indicates that the supplier can handle financial pressures and sustain operations until they receive payments.

How does the 10C model account for the varying importance of different factors based on industry type?

The 10C model adjusts the weight given to different factors depending on the industry. For example, in construction, financial stability and CSR are critical due to the risks involved, while in other sectors, like services, relationship-building and culture may be more important. The model adapts to the specific needs and risks of each sector.

How can businesses verify the information provided by suppliers during the selection process?

Verification can be done through a range of methods, including third-party audits, checking past project records, and using external sources to validate the claims made by suppliers. Businesses are encouraged to perform due diligence and deep dive into suppliers’ operations, especially for strategic contracts, to ensure that the information provided is accurate and complete.