A key part of the procurement process is the selection of suppliers. What criteria are commonly used in this selection process? Which criteria should be given the highest priority? Why?  You can use your own company or one you know of as an example.

book supply chain management: A logistics perspective, 11th edition By: Langley, C. John/Novack, Robert A./ Gibson, Brian for referencing. Once the discussion is complete I will need three peer reviews. Use the same book to reference the peer review discussions.

Deno Peer review 1

Selecting the right supplier for your business is crucial. The right supplier can act as a major strength in a business while the wrong supplier can be detrimental to it. The supplier procurement process is a very important step in the Managing Strategic Sourcing Process (MSSP). A business must prioritize finding the right supplier that meets its specific needs.

The supplier procurement process evaluates suppliers on 7 selection criteria, Quality, Risk, Financial, Reliability, Capability, Desirable Qualities, and Sustainability. Each of these factors plays a role in the companies ultimate decision in choosing the correct supplier. Although every factor is important, quality, reliability, and financial evaluations are often the highest priority in supplier selection, so we will focus on those.

Quality has become a customer expectation in recent years. Customers expect to receive quality goods and be able to return them if something goes wrong. With thousands of shopping options, the average consumers' minimum quality standard has increased. If a supplier is unable to reach this standard, it is important to find a supplier that can. "Typically the most important factor in supplier selection is quality. In today’s business environments, quality standards are very high, and suppliers are counted upon to take major responsibility for quality." (Coyle 2018)

Reliability is a crucial element in selecting suppliers. Reliability is most commonly associated with the ability to produce and ship goods on or before schedule. Late deliveries can lead to supply shortages, angry customers, and losses in sales. For companies that drop-ship directly from the manufacturer, late shipments reflect directly on the companies reputation. Although reliability can be synonymous with shipping and production time, it is not exclusive to it. Reliability also refers to supplier capabilities in customer service, product information, and flexibility. All of these aspects contribute to the relationship a company has with its customers and its suppliers. "Reliable suppliers are essential to your companies/organizations growth and good health and can be depended upon to keep your facility running in good shape and up to the government and industry standards, leaving you with complete peace of mind that you’re being looked after." (SCL, 2019)

Arguably the most important criteria used in the selection process is Financial. Because of its nature, the financial evaluation of a supplier is crucial. Does this supplier give the best prices for what it offers? Is this supplier able to withstand financial hardships? Does this supplier have the financial capabilities to grow with my business? These are all questions that you must be able to answer before deciding what supplier is right for you. If a supplier is at risk of shutting down, it can pose a threat to your business operations. "Financially unstable suppliers pose possible disruptions in a long-run continued supply of material. By declaring bankruptcy, a supplier providing materials critical to a final product could impair the functioning of a customer’s manufacturing operations." (Coyle 2018) If a supplier is overcharging you for products, it directly affects your bottom line and ability to stay competitive. If a supplier is unable to grow with your business, it may limit your companies potential to meet demand later on.

All of the factors in the supplier procurement process are important and must be thoroughly researched prior to deciding on a supplier, but the most important elements are quality, reliability, and financial.

References

Coyle, C., Langley, J., Novack, R., & Gibson, B. (n.d.). Supply chain management 10th edition (10th ed., Vol. 1).

The importance of supplier reliability | scl managed services. (2019, October 30). https://sclmanagedservices.com/the-importance-of-reliability/

Kat peer review 2

Several main criteria that are critical to the procurement process according to Langley et. al. (2021) are, “product/service sourcing, supplier selection, price negotiation, contract management, transaction management, and supplier performance management.” (p.141). Market research is necessary for understanding of options when it involves suppliers. Once a supplier is chosen, negotiations need to be drafted and accepted. I believe that the highest priority of the procurement process should be the product/service sourcing. The product or service sourcing is important because without it you can not have business. If a company were to market and offer a product or service that cannot be produced the most likely outcome would be failure. After identifying your product/service a supplier needs to be evaluated using market research or “pre-qualifying poetical suppliers” According to Langley et. al (2021), “Once the effort to identify capable suppliers has largely been completed, the next priority is to identify the pool of possible suppliers that can satisfy the users’ demands. This is referred to as pre-qualifying potential suppliers.” (p.147). The product/service sourcing makes me think of the grocery store chain Trader Joe’s because this company often has an influx of new products based on market availability. Some customers favorite items often go out of stock and are not restocked based on market resources. If trader Joe’s were to continuously advertise items that are no longer available, customers would become upset damaging the relationship between consumer and company. Most frequent Trader Joes consumers understand the come and go nature of specialty items, which creates more demand and increased sales.

References

Jr, L. C. J., Novack, R. A., Gibson, B. J., & Coyle, J. J. (2021). Supply Chain Management: A logistics perspective. Cengage.

Jaclyn peer review 3

According to the selected text, there are seven key criteria points to follow when selecting a supplier. These are quality, reliability, risk, capability, financial, desirable qualities, and sustainability. Quality is the highest priority of all these criteria when selecting a supplier. It is most important because it translates to potential product life, dependability, ease of repair, and design aspects that contribute to an overall product. If a commodity is of poor quality, it can be unreliable and cause more issues for a product and the customer base. I think of car companies like Toyota which are known for long last durable cars that have high-value retention this being due to their quality. Verses cars manufactured by companies such as KIA or Hyundai where the quality of parts is less, and the internal design of the cars is more plastic and fall apart faster. I know from experience of my ownership of a Hyundai when I was younger, I had constant problems with the windows or plastic parts coming undone inside the care. These sorts of issues create headaches for customers and translate to the reputation of a product and affect customer selection of purchase.

References

Jr, L. C. J., Novack, R. A., Gibson, B. J., & Coyle, J. J. (2021). Supply Chain Management: A logistics perspective. Cengage.