Supplier selection. Supplier Selection Criteria

The success of the business depends on how competently the suppliers are chosen. This is a law that no one can get around. So, you need to focus on the search. Not only novice entrepreneurs, but also businessmen with significant experience regularly work in this direction. But before how to choose a supplier, a number of important factors must be taken into account.

What should be the supplier

Goods must be delivered regularly, required quality, inexpensive. Ideally, when you can make payment after receiving the goods. Everything seems to be simple? Not really:

1. Too profitable offers can be the machinations of an experienced scammer. The reputation of the partner must be carefully checked. It's easy with the internet.
2. It is ideal to work directly with manufacturers. Often you don't need to order huge batches for this. Even if the cost is not enviably low, in this case it is also important to reduce the delivery time.
3. When signing the contract, it is necessary to take into account the possibility of returning defective goods, assess the risks if one of the parties fails to comply with the terms of the contract, in particular, the delivery time.
4. Products must be certified.
5. Too large batches of goods for small businesses are unprofitable, despite the excellent price, since the opportunity to regularly refresh the assortment is lost, to respond to new arrivals in their market sector. Small deliveries make the business more mobile, while there is the possibility of obtaining a deferred payment, you can invest less money and reduce your risks.
6. And most importantly, cooperation must be formalized, which significantly reduces the risk of fraud.

Search areas

Before, how to find a supplier, it is necessary to get rid of internal restrictions. It is very good if a local plant produces a certain range of products according to your profile. But do not forget that all competitors receive supplies from him.

It is reasonable to work with several manufacturers, including foreign ones. Of course, the products will be more expensive, but they will be exclusive and, importantly, often of better quality. All legal issues and problems with delivery will help to solve specialized companies, the payment for whose services is quite affordable. An example is our company, which provides any services related to international deliveries, connecting at any stage of work. Our specialists can, and provide a full range of services for the supply - the so-called "turnkey" complex.

In order to find a supplier yourself, you can use:

• specialized sites where wholesale suppliers offer their services;
• visiting specialized exhibitions, conferences and presentations;
• ordinary search engine;
• subject catalogs and magazines.

It is advisable to personally visit a potential supplier to establish more high level mutual understanding. This is especially important when working with imports.

If there's a problem how to find a supplier for a store without knowledge of languages, our company can solve the problem by providing a specialist working with finance and management different countries peace.

Like any job, search requires effort, knowledge, time and effort. However, having completed it, you can reap the benefits in the form of a thriving business. And our company will always provide the necessary qualified assistance, making your work easier and more productive.

There are a number of well-established methods for selecting a supplier. Which one to choose a company, it is worth deciding on your own.

Rating method

The rating method is the most popular when choosing a supplier. The analysis is carried out in several stages. Initially, it is necessary to develop a list of supplier selection criteria, and then determine the specific weight (significance) of each of them on a ten-point scale. The criteria may be the price, reliability, quality of the goods, the provision of a deferred payment, the possibility of supplying large consignments of goods, financial condition suppliers.

The criteria depend on the type of goods. In conditions of unification of the quality characteristics of the goods, price parameters come to the fore, with uniqueness and exclusivity - reliability and uninterrupted supply.

Further, each supplier is rated on a ten-point scale for each parameter. Then they are multiplied by the specific gravity and summed up. The final score for the company is obtained. Such operations are performed with each contender for the role of supplier. Based on the points obtained, the most optimal partner is selected.

This method only from the outside seems extremely simple. In practice, serious difficulties arise, which are associated with a lack of information for making objective assessments. Also, the working conditions declared by suppliers may differ from the actual state of affairs.

Cost estimation method

According to this method, a supplier is selected from which the purchase of goods (raw materials) is associated with the lowest costs and is most profitable. For each supplier, all possible costs and revenues are analyzed. These are, for example, transport, marketing, insurance costs, etc. In this case, logistical risks are taken into account.

We can say that cost estimation is one type of ranking method. Only here price criteria are analyzed in more depth.

Dominant characteristics method

In this case, not a multifactorial model of criteria analysis is taken as a basis, but only one criterion is taken into account. This can be price, delivery schedule, etc. This method is as simple as possible, but ignores other selection factors.

Also, some analysts emphasize the informal evaluation of suppliers and the importance of personal contacts. Such an assessment of communications with the supplier cannot be ignored in the selection procedure.

Otherwise, you will never be completely sure that suppliers are selected in the interests of the entire company, and not of its individual representatives.

Cm. used when choosing suppliers, carriers, various schemes of goods distribution, areas for a warehouse, etc. in

Obviously different intermediaries can offer various conditions supplies. Many buyers believe that the distributor's price is always higher than the manufacturer's, and the dealer charges more than the distributor. Theoretically, this is true, but for your company it may be quite different. Think about the turnover of the manufacturer, distributor or dealer. What is the turnover of this product in your company? Distributors who buy a huge amount of goods from the manufacturer receive such discounts that they can offer your company prices even lower than the manufacturer. It is unprofitable for a manufacturer to deal with small customers, since the volume of their purchases is tenths or even hundredths of a percent of its sales. Naturally, in this case there can be no question of an exclusive relationship to your company.

GENERAL CRITERIA

So, the price is not the only and often not the main factor when choosing a supplier. Your company should develop specific requirements for suppliers, then buyers will be less likely to make a mistake.

Large firms most often rely on a list of well-known, trustworthy suppliers. But when you need to establish new connections, you have to study the market. The supplier selection criteria are given in the relevant box.

TRADITIONAL METHODS

In logistics, two methods are mainly used to evaluate and select suppliers: the scoring method and the method of pairwise comparisons. Their difference is in the complexity and degree of subjectivity of the assessment.

The point method (see Table 1) is based on the assessment of each supplier on a point scale. The weight of each factor is determined by the manager who selects the supplier.

Table 1. Supplier selection by point method

The supplier's rating is calculated as the total sum of the products of the supplier's rating for each factor and the weight of this factor. So, in our example, the calculation for the first supplier looks like this:

minus this method is a high degree of subjectivity of the assessment, especially in determining the weight of the factor. This shortcoming can be largely corrected using the method of pairwise comparisons. It has many modifications, we will highlight two.

The first option can be called "better-worse". It is based on the rating system "0.8" and "1.2". If one supplier is better than the other in terms of the factor being assessed, then the first one receives a score of "1.2", the second - "0.8" (see Table 2). The weight of the factors is also evaluated in a similar way. The main disadvantage of this modification of the pairwise comparison method is that the rating system does not allow, if necessary, to indicate how much one supplier or factor is better or more important in a particular situation.

Table 2. Supplier selection by pairwise comparisons

Comparison of a supplier with others is done row by row (not by columns). For example, it can be seen from the table that supplier 1 is better than suppliers 2 and 4 by a certain criterion, but worse than suppliers 3 and 5. We have a score of "1" along the diagonal of the adjacency matrix, since suppliers are evaluated relative to themselves. As a result of processing the received matrix, we determine the rating of the supplier.

However, we will dwell in more detail on another modification, which is called the Hierarchy Analysis Method (AHP). This is a more rational method for selecting suppliers.

ESSENCE OF THE METHOD OF ANALYSIS OF HIERARCHY (MAI)

This method is becoming more and more common in logistics, when we are talking about the choice of suppliers, carriers, various schemes of goods distribution, areas for storage, etc. When using it, decision-making is based on an assessment of extensive, far from always unambiguous information.

The method involves a constant comparison of two factors based on some preference scale (see Table 3).

Table 3. Scale of relative importance of AHP

If factor i is assigned one of the above values ​​when compared to j, then factor j is assigned the inverse of i (1/value). If there is an integer value above the diagonal, then its inverse value is below the diagonal. That is, if one factor has a score of 9 (“absolute preference”), then the other has a score of 1/9 or 0.11 (“insignificant factor”), etc.

The scale of the method is based on the ability of a person to make quantitative distinctions between five definitions: 1) equal; 2) weak; 3) strong; 4) very strong; 5) absolute.

If greater accuracy is required, compromises can be made between the listed definitions.

Naturally, it is impossible to understand the essence of the method without an example, so let's analyze a specific situation.

EXAMPLE OF MAI

You must select one supplier out of four based on the following factors:

price of goods (rubles);

partion (pcs.);

location of the supplier (km);

supply failure (number);

delivery time (months);

transport costs for the entire batch (rubles).

The initial data are presented in table 4.

Table 4. Initial value of factors

Let us take into account the following ratios of the dominant factors:

The product price factor has:

absolute preference over the partion factor;

obvious preference over the location factor;

preference, a compromise between the essential and the obvious, before the supply failure factor;

significant preference over the delivery time factor;

preference, a compromise between insignificant and significant, over the factor of transport costs.

The supplier location factor has a slight preference over the batch factor.

The supply failure factor has a preference, a compromise between insignificant and equivalent, over the batch factor.

The delivery time factor has a significant preference over the batch factor.

The transport cost factor has an obvious preference over the batch factor.

The location factor has a significant preference over the supply failure factor.

The delivery time factor has a preference, a compromise between insignificant and equivalent, over the location factor.

The factor of transport costs has a preference, a compromise between insignificant and significant, over the factor of location.

The delivery time factor has a preference, a compromise between minor and significant, over the delivery failure factor.

The factor of transport costs has a preference, a compromise between insignificant and significant, over the factor of supply failure.

The factor of transportation costs has a preference, a compromise between insignificant and equivalent, over the factor of delivery time.

First, let's evaluate the weight of the factors (see Table 5).

Table 5. Assessment of the weight of factors

After the pairwise evaluation of the factors, the product of the values ​​of their evaluation by rows is calculated, and then the root of the degree of the number of factors evaluated is extracted from the obtained value. The weight of a factor is determined by dividing the value obtained by extracting the root by the sum of these values ​​for all factors. As a result, the sum of the weights of all factors should be equal to one.

To control the correctness of the comparison of factors, the consistency indicator (CC) is calculated as the sum of the products of the sum of the values ​​of the factor assessment in the row and in the column for each factor. Then the consistency index (SI) is calculated as the quotient of dividing the difference between the PS and the number of factors by the difference between the number of factors and one.

Next, the consistency ratio (RC) is calculated as the quotient of dividing the SI by the random index (SI). The OS must be less than 0.1, otherwise it is necessary to check the correctness of the assessment of the factors. SI depends on the number of factors and is selected from Table 6.

Table 6. Random index values

For example, to assess the significance of factors, the indicators will take the following values:

PS = 1.87 x 0.48 + 27 x 0.03 + 14.53 x 0.09 + 20.50 x 0.04 + 8.95 x 0.14 + 6.14 x 0.21 = 6.48 ;

IP = (6,48 – 6)/(6 – 1) = 0,1;

OS = 0.1 / 1.24 = 0.08.

Conclusion: since OS

We calculate the supplier's score for each factor (see tables 7, 8, 9, 10, 11, 12) using the data in table 4. This is done in the same way as when assessing the weight of factors. That is, the product of the score values ​​of suppliers by rows is calculated, and then the root of the degree of how many suppliers are evaluated is extracted from the resulting value.

Table 7. Comparison of suppliers by product price factor*

Table 8. Comparison of suppliers by batch factor**

plays an important role in the catering industry right choice supplier. The profitability and success of the company depends on this choice. If the supplier of the products is not selected correctly, then the cost of the finished product increases, and the payback of the initial investment in the business is delayed. Therefore, the search for a supplier must be taken seriously. Company Wow! Holding” will tell you what you need to pay attention to in order to make the right choice.

Choosing a reliable supplier of goods in the field of catering

What is HoReka? There is a line of business among suppliers called HoReCa:

• Ho-hotel - hotel;
• Re-restaurant - restaurant;
• Ka - cafe / catering - cafe, service.

Suppliers who specialize in this, try to cover the entire spectrum of the above areas. Companies are striving for universalization: to combine the food component, and the furniture, and the decor of institutions, and professional equipment.

This is a very recent innovation. It helps not to depend on the margins of local individual entrepreneurs, to purchase goods in the required quantities for yourself and partners. The only additional costs are the cost of delivery, which is also reduced to a minimum by sharing it between partners.

How to protect yourself from risks in working with suppliers

Any novice entrepreneur should have contacts of the maximum number of suppliers of all necessary goods in his or in a neighboring city, so that in case of an unforeseen situation he can place an order without financial losses for his business. At a cost as close as possible to the one he usually pays.

It is necessary to analyze the supplier market in order to find more favorable prices for goods. Competition among suppliers is growing, so every year profitable price offers appear on the market.

Supplier reliability is an important component of a company's success and sustainability. Especially in a crisis. We will determine the principles for forming a portfolio of suppliers, analyze the role of suppliers in our production, formulate requirements for a supplier, and discuss some anti-crisis measures.

In order to competently manage procurement, we need to answer 4 questions:

1. what we buy
2. where do we buy
3. from whom and under what conditions,
4. how we will buy in the future.

Creating a quality product requires not only the selection and evaluation of a supplier, but also the management of suppliers. Supplier management is the creation and management of a portfolio of suppliers.

Phases of market development and principles of interaction with the supplier.

In the early stages of the market, only one thing was required of supply - the constant availability of the necessary goods. Later they began to demand a minimum price. Then came the time for quality and additional service. Relatively recently, many markets, in particular, the market for electrical products, have entered a phase of development that requires the creation competitive advantage together with suppliers. So now we are talking about a real partnership.

The highest form of partnership is a form in which the supply chain of three to four companies is a single logistics system - vertical integration. Unfortunately, I cannot provide specific example V Russian business. Such an example could be, suppose, the integration of a development company, a manufacturer of electrical installation products, a transformer manufacturer, a testing laboratory and an engineering company. Or such a chain: a manufacturer of cable products - a manufacturer of electrical installation products - a manufacturer of lighting products. In another area, it may be such a chain: a fiber manufacturer - a fabric manufacturer - a clothing manufacturer - a clothing retail chain.

This form of partnership will really increase the competitiveness of all enterprises in the value chain. For example, the only advantage local producers have over imports is the ability to produce more of what is sold at a lower cost, faster than importers, and stop making what is not for sale. In such an association, it is possible to exchange information on sales issues and production plans in order to reduce inventory and reduce the time to develop new products, actually reduce the lead time for customer orders, etc.

To determine your own strategy for suppliers, you need to perform several stages of work. Let's look at one specific example.

We have already talked about a company that started the change with a reorganization of internal supply and warehousing. The second step was to create a portfolio of suppliers and develop a supply management strategy.

Step 1. Analysis of the range of purchased products.

To begin with, we analyzed the range of purchased materials and divided them into the following categories:

1. Non-critical for production / sales - those materials that can be easily replaced by analogues and the absence of which will not lead to a stop in production or loss of customers;
2. Basic materials for production/sales. These include, among other things, consumables for equipment;
3. Problematic materials are materials from the essential category that are difficult to purchase, transport, store, process (for example, scarce, perishable, dangerous, requiring special conditions transportation and storage, etc.);
4. Strategic materials are those most significant highly profitable materials that will now and in the future be the main ones, and from which the main product will be made, which in currently is under development.

Step 2. Determination of the role of the supplier in the production process.

Figure 1. Dependence of the role of the supplier on the role of materials

Step 3. Determining the characteristics of a good supplier in different categories.

Then we determined what basic requirements this or that type of supplier should meet:

regular supplier

There were quite a lot of non-critical materials. The frequency of deliveries was different: both single, and regular, and periodic. They accounted for about 40% of operations for registration and acceptance of orders. Therefore, the following requirements for suppliers were adopted:

1. convenience of working with it: the minimum delivery shoulder (from the moment of ordering to the arrival of the goods), mandatory delivery by the supplier according to the agreed schedule, convenient packaging, with multiple deliveries per month, registration with a single invoice and a package of documents, etc.
2. standard quality and low prices
3. expedient cooperation on contractual obligations.

At the same time, 2 suppliers were chosen as the optimal number of suppliers for one type of product with a 50:50 division of the volume of purchases between them. For insurance, the purchasing manager will have to periodically monitor the market and have 2 more insurance suppliers in case the need to "intercept" the goods.

In a crisis situation, non-critical materials become the first contender for cost reduction. Carefully analyze the entire range and determine which products can be discarded and which can be replaced with cheaper analogues, for which products the quality requirement can be reduced.

Qualified Supplier

Basic materials are the most expensive part. The frequency of deliveries is, in most cases, regular. Any delay in the supply of materials or poor-quality equipment may result in a stoppage of production. To compensate for this, you have to keep very large safety stocks, which seriously increases costs. Materials with latent defects, getting into production, lead to defects in finished products and customer complaints. Therefore, the following requirements for suppliers of basic materials have been adopted:

1. Reliable supply: strict observance of the agreed deadlines, accuracy of picking, reservation of materials in the supplier's warehouse, delivery by the supplier
2. Stable product quality, in addition, the supplier undertakes the functions of quality control of products and guarantees quality control
3. Mandatory deferred payment. At the same time, the ideal period was considered to be the availability of an investment resource of 7 days (i.e., from the moment when raw materials are already shipped to the client in the form of finished products and money is received for it, until 7 days remain until the payment of accounts payable).

At the same time, it was determined that the number of suppliers for one type of product will also be 2 (in some cases 3) with the distribution of the volume of purchases between them 70:30, i.e. one main supplier, another spare. Here, market monitoring should be carried out constantly, but the main emphasis is on developing partnerships with selected suppliers. And therefore it is extremely important to take the evaluation of the supplier seriously when choosing it. Changing suppliers can be very costly for a company.

In a crisis, aim…for the future. Evaluate all the resources you have: customers, suppliers, warehouse, products, technologies, equipment, personnel, etc. Analyze changes in the market and make your forecast for the development of the situation in your market, in the supplier market and for you. You need to determine what is unique to you and what you will need in the future. You need to get rid of everything that you do not need, even if you once paid dearly for it. In the absence of an investment resource in the company, leave only the minimum materials that are extremely important for survival and are needed by customers.

Reliable supplier

There were not so many problematic materials. But the risks and costs were very high. Among them were also goods that had to be purchased in large volume in China due to the recurring shortage of Russian market, long wait for delivery and long store. Problem materials accounted for 24% of costs and 18% of production downtime.

After analyzing all kinds of problems, it was decided that suppliers of problematic materials should meet the following requirements:

1. Willingness to carry out joint programs to optimize deliveries: change shipping rates, packaging quality, frequency of deliveries, take care of improving the safety of products, safety of transportation, storage, processing.
2. Joint focus on value creation, including the supplier's ability and willingness to take part of the processing into their own production, as well as provide training for workers and operators in competent work with raw materials, provide technological advice and support.
3. Proximity of the supplier. For remote suppliers - availability of distribution channels or regional warehouses close to our production; or the provision of such a loan term, albeit in several tranches, which will be repaid at least at the time of processing of the purchased raw materials.
4. Long term contracts.

For almost all problematic materials, it was decided to select one supplier each, which previously showed not only partnership intentions, but also a willingness to integrate. This is the preferred provider. Joint programs require a lot of time and effort on both sides. And here opportunistic relations and pressure on the supplier do not fit. In case of force majeure, the market should be regularly reviewed for the presence of a safety supplier for a one-time purchase of a one-time volume.

What to do with accounts payable with low solvency? Shift all payment delays to goods that bring neither profit nor money into circulation. Pay on time only for the most important products, selected from the category of basic, problematic and strategic materials. Do not pay immediately with those suppliers that you have replaced or withdrawn from the assortment line. Pay those suppliers that you can't do without and that have demonstrated their resilience and loyalty.

Strategic supplier

Strategic materials are those materials whose share in value creation is quite high now and in future key, highly profitable products; they have a certain share of the costs in total costs, high participation in profit creation. Such materials turned out to be about 12% of the entire range. After a thorough analysis of all problematic situations with such materials, as well as development / development plans for new products and procurement programs, the following requirements for a strategic supplier were determined:

1. Readiness for system integration and a coherent business policy based on the technology already available at the enterprise
2. Optimal organization of in-house production thanks to good cooperation with its sub-suppliers
3. Availability of sufficient funds for the implementation of research and development work, focus on innovation
4. Willingness to accept market risks.

After analyzing the supply market, it became clear that virtually no supplier meets these requirements. It was decided to choose one supplier closest to this portrait for its further development and cooperation. Transfer 70% of the volume of purchased products to this supplier, and leave 30% to a qualified supplier. In the future, transfer the entire volume to it, but only when the company is absolutely sure of high degree reliability and partnership.

In a crisis, you can see how well the supply strategy was defined, and whether the choice of supplier was carefully carried out in the previous period. It is through the work of existing suppliers of problematic and strategic materials that the quality of your supplier selection and supplier management process will be seen. And it is precisely now that we need to work especially hard and carefully to change the business system. Previous methods have been growth-oriented. Now the situation has changed fundamentally and new, high-quality, low-budget forms of relationships, other processes and technologies are required. It is necessary to build a system that will allow the business to survive now and become the basis for future growth. You should not wait for spring and quietly look at what will happen, or think that the crisis will not affect you much. Already, fast, decisive and methodical action is required, which does not end with budget sequestration.

Step 4. Supplier Portfolio Analysis and Evaluation.

After identifying the portraits of a good supplier depending on his role, a thorough analysis of all available suppliers was carried out to select the main suppliers in order to optimize the entire portfolio. The entire list of used suppliers consisted of 211 companies. At the same time, only 98 of them were used quite constantly, and only 56 did not have serious complaints about their work. The distribution of purchase volumes between suppliers was random, no long-term contracts were signed, and the performance of suppliers was not evaluated, with the exception of fixing complaints. According to some materials, there were claims against all suppliers, and therefore, we additionally conducted an analysis of the market, expanding the lists of potential suppliers by type of product (long list).

After defining the role of materials and the role of suppliers, it was decided to gradually reduce the supplier portfolio to 114 companies (see the supplier selection process in Figure 2).

To select suppliers, a mechanism was created for selecting and evaluating a supplier for all categories and types of goods. As a basis, we chose a scheme of weighted estimates from all methods.

An example of applying a weighted rating scheme:

For example, for one of the types of raw materials, the quality factor was identified as the most important. We also chose two other parameters - price and service, which are less important, but significant. It was determined that the supplier's rating would be evaluated on the assumption that quality is 50% of its original value, and price and service are 25% each.

Choose a scoring system:

Quality - subtract the percentage of rejected items from the original 100

Service - for each delayed delivery subtract 5 points from 100

Price - calculates the lowest price index based on known data as a percentage of the price actually paid (divide the lowest known price by the actual price paid and multiply by 100)

In the last quarter, the supplier delayed deliveries 5 times, the minimum price for that period was 95% of the price paid, 12% of the delivered products were rejected. Evaluated according to the scheme:

Quality: 50%×(100-12)=44.00

Maintenance: 25%×(100-25)=18.75

Price: 25%×95=23.75

_________________Total: 86.50

When evaluating other suppliers according to this scheme, this supplier took 3rd place in the rating.

It should be noted that in each category of materials (non-critical, basic, problematic, strategic) there were certain different types products, individual evaluation parameters, which depended on the degree of importance of the product in the line of purchased products and on the degree of development of the supply market. For example, the requirements for cable and plastic suppliers were different.

Figure 2. Supplier selection and evaluation process

Step 5. Work with the supplier.

Further, meetings were held with all the suppliers who were on the short list. They were informed about the requirements and the most important aspects of the interaction. It was proposed for another quarter (according to some materials - 1 month) probation, at the end of which a decision will be made on the volumes and terms of contracts. All suppliers were given Feedback performance rating, and its rating among other providers was reported. As a result of such work, the number of suppliers decreased in 2 quarters to the selected value. And claims for the quality of delivery (terms, equipment, product quality) on average decreased only for 1 quarter by 34%.

Now it is necessary to carry out serious work with the main clients and suppliers. Determine together sales and purchase forecasts, opportunities and market conditions for customers and suppliers, openly discuss the position and financial condition. Such meetings should be made regular. It is very important to make criteria measurements and monitor the dynamics. Only such joint and open efforts will allow us to stay afloat and quickly start after the crisis bottom.