Sourcing Decision:

Choosing the right

supplier
By Group 5
Shraddha Gaware PGP13218

Shreedipta Biswas PG13219

Shruti Yadav PGP13220

Somil Jain PGP13227

Ujjwal Mathur IPM01144

Vibhi PGP13256
Introduction
ABC ltd. is an electronics manufacturing firm based in
India
It was established in 1985 and deals with multiple
products in consumer electronics like LED/LCD TVs, air
conditioners, etc.
Revenue in current year from operations: INR 50-60
million
The firm has nearly 180 employees
The firm has quality accreditation and environmental
management systems including ISO 14001 series
Has presence in Indian and some South African countries
It has distribution channels and also sells from other
distribution networks
 Why Look for suppliers?

Flexibility Innovation Evolving Market

their existing suppliers are
not able to accommodate
the changes and demands
of the rapidly changing
electronics market
firm aims to implant firm has traditionally relied on
innovative initiatives into predefined criteria such as price,
their supply chain delivery, and quality, but now
operations and offer more recognizes the need to emphasize
sustainable products flexibility and innovation capability in
supplier selection
Challenges while selecting right
supplier
Strategic Alignment:
01 Suppliers must align with the firm's strategic goals and engage
in joint business planning
Consistency Expectation:
02 The firm expects consistent supplier performance, posing a need
for continuous commitment
Multi-Criteria Assessment:
03 Supplier selection involves diverse qualitative and quantitative
variables, requiring a comprehensive approach
Flexibility Assurance:
04 Ensuring supplier flexibility poses a challenge, demanding a
balance with specified criteria
Leadership Commitment:
05 Senior managers and executives face the difficulty of providing
ongoing commitment and concurrence
 01
Supplier Selection How sourcing process can
Sustainability
Innovation affect the supply chain
Drivers of Supply Chain:
Cost Considerations
Cost-benefit trade-offs
Collaborative cost sharing
02 Facilities Inventory Transportation Pricing Information
Sourcing

Affects subsequent stages of the supply chain process

Risk Management
03 Brand Image
Portfolio diversification Aids in value creation | Achieving Strategic Fit

Regulatory Compliance
Certifications
Processes, methods
04
Long Term Strategy
05 Alignment with vision,
mission of the firm
 EVALUATION SUB
CRITERIA FACTORS

01 COST Overall Cost, Design Cost, Material Cost, Tooling Cost

DELIVERY Specified delivery time , Delivery lead time, Proximity

02 to manufacturing site

03 QUALITY Process and Technical- , Material availability

Overall quality , Defects , Corrective measures

04 PERFORMANCE
Supplier Certificate, Standard & Advanced Features,
Financial Health, Trust, Strategic Alliance
New selection
Frozen Schedule, Job- Classification, Number of criteria and
05 FLEXIBILITY setups, Relevant Experience & Assistance
evaluation
- Number of engineering changes, Level and- Consistency
06 INNOVATIVENESS
of RnD Investment, Lead Time to Design new Product
 Supplier Selection Process
Define Requirements and Criteria
Market Research and Identification
Supplier Evaluation
Request for Information (RFI)
Request for Proposal (RFP)
Supplier Assessment
Site Visits and Audits
Financial Stability Check
Supplier Performance History
Negotiation
Performance Monitoring and Feedback
Continuous Improvement
 Supplier Selection - Key Points
Supplier
Certification
Certifications like ISO 9000 helps
organizations in reducing Audit
costs and ensures that a certain
ser of practices are being
followed
ISO 14001 stands for
Environmental Management
MCDM Approach
It is important to outline the key
requirements of the organization
on the basis of which the
selection decision should be
made
It helps in ranking the
alternatives according to a
defined criteria
Qualitative Factors
The selection process is not a one
time process, on the basis of
difficulties that arise in the real life
business environment, the
trustworthiness of the supplier can
be tested
For Long Term functionality of
Business it is important that trust
building is given utmost
importance
Thank
You