VENDOR

SELECTION
IPPC Webinar
6 Juni 2020
 Adhe Priyambodo
Working history
Material Planner, PT Henkel Indonesien
Raw Material Manager, PT Sepatu Bata, Tbk
RM Procurement Manager, PT PZ Cussons Indonesia
Direct Procurement Manager, PT Frisian Flag Indonesia
Regional Procurement Manager, PT Shell Indonesia

Education Professional membership

- Engineering Physics, ITS Surabaya - Chartered Institute of Procurement
- Diploma in Procurement & Supply, CIPS and Supply (CIPS), UK
- Indonesian Production & Operations
Management Society (IPOMS)
- Asosiasi Logistik Indonesia (ALI)
2 .
 Why ?
“Mengapa Vendor Selection Penting?”

Key
Topics
How ?
“Bagaimana melakukanVendor Selection?”

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 Select
Your
Team

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 Tender
Award
Pre-Award Post-Award
Process Process

Procurement
Process Sourcing Contract
Management Management
> Define Needs > Sign
> Search > Perform
> Select > Coach

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 #1

Mengapa Vendor
Selection Penting?

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 Procurement Contribution (1)

Customer Satisfaction

Time to Market
Creating
Corporate Value
+
Key Improving Productivity
Interest
Managing Risk
Managing
Return of Investment Risk

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 Procurement Contribution (2)
Spend Value Risk
Management Improvement Management

“Value for Cost

Supply Risk
Money” Saving

Cash Legal &

Creation Ethics

Waste
Environment
Reduction

Innovation

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 1. Spend Management : Konsep “Value for Money”

Right
Quality Right
Quantity

Right
Price
5R
Right
Time
Right
Place

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 2. Value Improvement : “Cost Saving”
Scenario 1 : Sales naik 10%
Component Value (Rp) % of Sales
Sales Revenue 1050 105%
Material Purchase 630 63%
Other Cost 100 10%
Laporan Laba - Rugi
Cost of Good Sold 730 73%
Component Value (Rp) % of Sales Operational Expenses 210 21%
Sales Revenue 1000 100% Gross Profit 110 11%
Material Purchase 600 60%
Other Cost 100 10%
Cost of Good Sold 700 70% Scenario 2 : COGS dan Opex turun 5%
Operational Expenses 200 20%
Component Value (Rp) % of Sales
Gross Profit 100 10%
Sales Revenue 1000 100%
Material Purchase 570 57%
Other Cost 100 10%
Cost of Good Sold 670 67%
Operational Expenses 190 19%
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Gross Profit 140 14%
 2. Value Improvement : “Cash Creation”

Term of Payment Consignment

Open
Account
Cash On
Delivery
Letter of
Credit
Payment In
Advance

More Risk for Buyer

Cash Advantage for Buyer

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 2. Value Improvement : “Waste Reduction”

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 3. Manage Risk: “Supply Continuity Risk”

✘ Bencana Alam ✘ Gangguan Listrik

✘ Kebakaran ✘ Gangguan Transportasi
✘ Kekacauan Politik ✘ Pemogokan
✘ Kebangkrutan ✘ Kelangkaan Bahan Baku

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 3. Manage Risk: “Legal and Ethics”

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 3. Manage Risk: “Environments”

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 Green & Responsible Procurement

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 Procurement Contribution
Spend Value Risk
Management Improvement Management

“Value for Cost

Supply Risk
Money” Saving

Cash Legal &

Creation Ethics

Waste
Environment
Reduction

Innovation

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 #2

Bagaimana melakukan
Vendor Selection ?

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 Operational vs Strategic Procurement
High

Spend
Strategic

Operational

Low
Low Risk High
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 Kraljic
Matrix Bulk
Material/
Commodity Custom Bulk Raw
Material
Standard
Spare part
Custom Packaging
Standard
Packaging Machinery

Stationary Custom
Spare part
Consumables Specialty

Office service Secondary

Ingredients

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 Right Strategy
> Define Sourcing Strategy
> Seek Approval from Stakeholder

How?
Right Execution
> Tender : RFQ / RFP / ITT
> Negotiation & Awards

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 Contract Profile ?
> Contract Scope ? – volume, SKU, areas, etc.
> Specification ?
> Contract Budget ?
> Single, Dual or Multi Source ?
> Local or Import ?
Sourcing > Supplier type ? – traders/producer, local/MNC, etc.
> Contract Duration ?

Strategy > Pricing Scheme ? – item, lumpsum, cost-plus, etc.

> Payment Term & Incoterm ?
> Contract KPI ? – on-time delivery, quality, safety, etc.
> Critical Contract Term ? – min volume, insurance, etc.

How to Approach the Market?

> Tender approach : open, restricted, negotiated
> Award Criteria : criteria, scoring method, PIC
> Timeline
> Resource – team, budget
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 Open Restricted Negotiated
Invite to Tender List Potential Suppliers List Potential Supplier
(Single / Multiple)
(RFQ)

Pre-Qualification (RFI)
Invite Suppliers to Tender
(RFQ)
Receive Bid Select Sort-Listed Supplier
based on pre-qualification
criteria

Tender Invite Sort-Listed Supplier to

Receive Bid

Approach Evaluate Bid

Tender (RFQ)

Receive Bid Evaluate Bid

Clarification & Evaluate Bid

Negotiation
Clarification & Negotiation

Clarification & Negotiation

Award Award
Award

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 What ? How ?
Technical Commercial Technical Commercial

Legal:
Capability Legal Questionnaire Integrity
Screening

Pre- Plant Visit / Financial:

Qualification Capacity Financial Audit Ratio Analysis

Ethics:
Quality Ethics: Trial Certification
Assurance Labour, Check
Sustainability,
etc.
Who’s responsible
HSE
for Pre-Qualification
process ?

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 Total Cost of
Technical Ownership
Value Add Solutions

Acquisition Cost Innovation

Continuous
Good Tooling
Award “Functional Fit”
Improvement

Criteria Be able to work Operating System Integration

with us on the
same technical
level CSR
Maintenance

(eg. Quality,
Delivery, Service, Flexibility
Safety, etc.) Training

Reputation
Disposal

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 > Supplier must sign-off our code of practice
> Single contact points
> Communicate the process & timeline clearly
Tender > Give same responses to all participants questions

Ethics > No supplier own the IP of specification

> Always communicate in writing
> Obtain management mandate before negotiation
> Communicate award and regret officially

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 THANKS!
Any questions?
You can find me at:
✘ adhe.priyambodo@gmail.com
✘ 0811 9700 437
✘ Adhe Priyambodo

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