1. Chapter 13 Supplier Evaluation and Supplier Relationships ©McGraw-Hill Education. All rights reserved.

2. Key Questions Addressed in Chapter 13 How do we evaluate supplier performance? How do we manage our supplier relationships?

3. Example of a Categorical Supplier Evaluation and Rating ©McGraw-Hill Education. All rights reserved. 3

4. Weighted Point Evaluation Systems Identify suppliers – Important suppliers and/or critical goods and services Identify factors or criteria for evaluation Determine the importance of each factor Establish a system to rate each supplier on each factor ©McGraw-Hill Education. All rights reserved. 4

5. Customer Satisfaction and Supplier Performance ©McGraw-Hill Education. All rights reserved. 5

6. Buyer-Supplier Relationship: Investment Versus Rewards Obtained ©McGraw-Hill Education. All rights reserved. 6

7. View of Buyer-Supplier Relationships ©McGraw-Hill Education. All rights reserved. 7 Traditional Lowest price Specification-driven Short-term, reacts to market Trouble avoidance Purchasing’s responsibility Tactical Little sharing of information Partnership Total cost of ownership End-customer driven Long-term Opportunity maximization Cross-functional teams and top management involvement Strategic Both supplier and buyer share short- and long-term plans Shared risk and opportunity Standardization Joint ventures Share data

8. The Deployment Path to Partnership ©McGraw-Hill Education. All rights reserved. 8 1. Supplier Assessment (Potential) 2. Supplier Improvements 4. Supplier Alignment 3. Supplier Rationalization Supplier Partnership 1. Supplier Assessment (Potential) 2. Supplier Improvements 4. Supplier Alignment 3. Supplier Rationalization Supplier Partnership