Speaker 1: Hi class, I covered chapter seven supplier evaluation and selection. In this presentation I'm going to go over the seven stages of supplier evaluation and selection process and dig a little deeper by showing you some of the supplier databases I found. Step one is to simply recognize the need for supplier selection. And this need can come from many different sources or different departments, but ideally you're being proactive and you're being kept informed of major projects or needs, so they have plenty of time to make smart decisions. Step two, you want to identify key sourcing requirements. The three major criteria are quality cost and delivery. And, you know, ideally you want all three right, but it's important to recognize that what's most important to your company. So, if you have a just in time system, then you might need to prioritize delivery performance to make sure you don't have any disruptions. You also want to determine how much resources you're going to put into the search by weighing the capability of your current suppliers against how important the requirements are. So if your current suppliers are working fine, or, you know, pretty good. And the requirements are just a low priority, then you might call the search entirely. But if you know the importance is really high priority, then you're definitely going to want to get the search going. Step three is about finding potential supply sources. And this is a large list of possible sources but keep in mind that not all of them will be necessary for each search. For example, you might not want to send a representative to a trade show if you're just looking for basic supplies. And we're also going to dig in a little bit to databases, but that's going to come in later. Stage four is where you determine your sourcing strategy. You might be looking at international suppliers or trying to keep it local. International suppliers might have lower prices and better technology, but a local supplier can sometimes make smaller or more frequent deliveries. So it just depends on where you're placing that importance. Buying directly from the manufacturer can get you better prices too, but not all manufacturers sell directly to consumers. So having spoken with many manufacturers and warehouses directly, I can safely say that customer service isn't always a business priority for them either. You also want to look at critical issues. You know, is the supplier a direct competitor? So maybe it would make more sense to go with a supplier that has your best interest in mind, even if you're sacrificing in another area. You might also want to make sure your supplier's environmental and social ethics are in line with your company's. When you get to stage five, you're going to have a giant list of suppliers, potentially, and you want to narrow it down. In stage five, you want to examine your suppliers in detail for probable issues down the road, and take into account things like financial stability, delivery history, and quality. This stage is where you might visit the supplier's facilities. Here we have that cool graphic from the book, just showing you how to screen out suppliers. When you get to stage six, you're going to conduct a detailed view of supplier and reach agreement. So you're going to compile all the information gathered and make your final evaluations. As each company has different needs, it's important to create evaluation categories and assign weights to each one, you know, that fit what your company needs specifically. You can then divide the categories further into subcategories and assign weights to those as well. Creating this evaluation lets purchasing make informed decisions, and hopefully it leads to less bias. Step seven, finally, we have selected our supplier and we're reaching an agreement. The negotiations can be complicated or they can be simple depending on the type of order. So let's go ahead and take a look at a couple of the databases I found. The first one is ThomasNet. And I'm not an expert by any means, I just want to show you a couple of the databases, because I thought they were kind of interesting. So ThomasNet is free to use, and you can search for suppliers. And if you're a supplier you can actually list for free as well. So let's just do a little search for dog bets. I like dogs. And I like bets. Let's see. Here we go. And you can, you know, look for local suppliers, kind of live in the middle of nowhere. So even within 100 miles we're looking at L.L. Bean, right. So if I expand it to 500 miles, you know there's quite a few more options that come up. Take a look at the supplier page, you can see the information here is actually pretty sparse. It, you know, it's got their website, the manufacturer, you know list of products, and that's kind of it. But, you know, for a free resource. It's pretty cool you know it's just going to give you access to thousands of suppliers for so many different products. So, you know, it's free to use it's free to list right but it is a massive database, and it's getting funding from somewhere and I looked into it and it is from the suppliers. So while they can list for free. They do also have paid packages for advertising and marketing. And, you know, I couldn't confirm whether or not a supplier could prioritize their listing, or, you know, if your results are skewed at all by how they get their funding. But it's important when you're using free resources free databases to keep that in mind, you know that they're getting money somehow it's really expensive to run a database like this, and maybe do a little research into where that funding is coming from, and if it's giving you bias in your results. The second database, I wanted to show you is Amazon's Jungle Scout. And this is a paid service you can't search it for free so I'm not going to be able to give a demo, but they do have a lot more information available about each supplier. It can show you their delivery and order history. It can let you know if a supplier can fulfill, you know, smaller orders too. And even pretty neat too, you can actually make a purchase order directly through the website. Of course that would be skipping a lot of the steps in our process that we're covering. So you want to go through the whole process, ideally, confirm that it's a good supplier. And then you can make purchase orders right through the website. It's pretty neat stuff. That's the seven stages of the supplier selection process, and I hope this was helpful.