Ch 13 - Supplier Evaluation & Relationships

Question 1

Informal evaluation

Answer 1

Assessments of the supplier by internal users and others anywhere in the buying org where supplier contact takes place

Question 2

Semiformal: executive round table discussions

Answer 2

Regular, annual discussion between top executives in the buying organization and those of the supplier.
-help cement relationships between the two orgs at a high level

Question 3

Formal supplier evaluation and rating

Answer 3

Attempt to tract actual performance over time.

Question 4

Weighted point evaluation system

Answer 4

Process is to:

1. Identify the factors or criteria for evaluation
2. Determine the importance of each factor
3. Establish a system for rating for each supplier on each factor

-most track major suppliers more closely than those sources deemed to have less impact on an org performance

Question 5

Unacceptable suppliers

Answer 5

Fail to meet operational and strategic needs of the buying org

• stop business and substitute for new suppliers
• they create greater problems for the purchasing org

Question 6

Acceptable suppliers

Answer 6

Meet current operational needs required by contract

-provide performance that other purchasers could easily match and accept suppliers provide no basis for competitive edge

Question 7

Preferred suppliers

Answer 7

Have a system or process orientation with preferred suppliers and this integration avoids unnecessary duplication and speeds up transactions that normally are handled on an electronic basis
-mutual improvements, eliminate nonvalue

Question 8

Exceptional suppliers

Answer 8

Meeting and exceeding

• mutual breakthroughs = competitive advantage
• patience and persistence for mutual breakthrough and relationships

Question 9

Supplier performance

Answer 9

Greater impact on the productivity, quality, and competitiveness of the org than most managers realize

Question 10

Supplier goodwill

Answer 10

“Relationship marketing”

• sellers are jealous of this, it’s a major asset
• needs to be carefully cultivated , jealousy guarded

Question 11

Partnership with suppliers

Answer 11

Gives lawyers discomfort, it has certain obligations not part of standard purchaser-seller partnership.
…. So some purchasers chose the term preferred suppliers

Question 12

Operational partnerships

Answer 12

Formed around leverage items in portfolio analysis where the attainment of the desired levels of quality, quantity, delivery, price, and service are achieved at the lowest total cost of ownership

Question 13

Strategic partnership and alliances

Answer 13

Makes strategic difference to both buyer and seller and attempts to seek sustainable competitive advantage
-share conviction of interest of both to form relationship beyond the standard mode of trade

• success: align quality, cont improvement, and customer service
• long term relationships
• customer/supplier team support

Question 14

Concerns about partnerships and alliances

Answer 14

• at least one partner might wish to take advantage of the preferred status and let the commitment and relationship deteriorate.
• single sources lies in becoming puppets of suppliers
• suppliers knows that customers depend on them, and may charge excessively , let quality slip, slow down process
• unpredictable with single sourcing