ISSUES SURROUNDING SINGLE SOURCING OF

SUPPLIERS

•Lead times and on-time delivery•Quality and quality assurance•Flexibility•Location•Price•Product or service charges•Reputation and financial stability•Other accounts

Considerations When Choosing a Supplier

Vendor A Vendor B Vendor C

PriceQualityServiceReputation

Evaluating Sources of Supply

•Vendor analysis: Evaluating the sources of supply in terms of price, quality, reputation, and service (add column for weights if appropriate).

Supplier Partnerships

•Ideas from suppliers could lead to improved competitiveness

•Reduce cost of making the purchase•Reduce transportation costs•Reduce production costs•Improve product quality•Improve product design•Reduce time to market•Improve customer satisfaction•Reduce inventory costs•Introduce new products or services

Aspect Partner Adversary

Number of suppliers One or a few Many, play off each other

Length of relationship Long-term May be briefLow price Moderately important Major issueReliability High May not be highOpenness High LowQuality Insured at the Source Buyer inspectsVolume of business High Depends on

number of suppliersLocation Proximity may be stressed Dispersed

for short lead times Flexibility Relatively high Relatively Low

Supplier as Partner

Supplier Audits

•Means of keeping current on suppliers’ performance

•Factors covered in an audit

•management style•quality assurance•materials management•design process used•process improvement policies•procedures for corrective action and follow-up