Chapter 3
Chapter 3 is the outcome for both of the methodology (interview and process inspection). The researcher has related the sub questions with the two type of methodology. As the reader go throw chapter 3 he will be able to get the answers for both main and sub questions.
3.1Technical Soundness
Technical soundness is one of the criteria that are used to register ad evaluate suppliers. This is one of the areas that the respondents in the study highly complained. In the interviews, it was evident that the current system failed to effectively evaluate the technical expertise of the supplier. As such, this exposed the organization to deficiencies in relation to emerging technologies and advancement in handling the supplies. As such, due to this inability, the existing manual registration and evaluating system was affected negatively since the current system has failed to provide a solid criterion than will be used to register thus evaluate suppliers.
3.2Management Competence
Management competence of the supplier is a key factor that defines a good supplier. A good supplier registration and evaluation system should have the ability to evaluate the competence of the supplier management. Therefore, from the responses that were obtained, it was evident that ability to evaluate supplier management competence rated average. As such, there was a great concern relating to this issue. The concerned is founded on the fact that management competence of the supplier highly affects the supplier ability to deliver. Therefore, inadequate consideration of this ability reduces the organization ability to assure competence in supplier management that is essential to ensure the supplier ability to deliver.
3.4Adequately resourced and Financial Stability
The respondents held the opinion that the current system has average consideration of the financial stability and resources allocation to the company’s supply. Therefore, this boosted the organization effort to ensure that the suppliers are registered according to their financial muscle. As such, this ability makes sure that the organization registers suppliers in relation to their financial commitment to the company supply and the financial stability of the supplier entire organization. The aspects were one of the few that enjoyed a relatively positive feedback from the interviewee.
3.5 Quality
The responses relating to the ability of the current system to deliver value through high quality supply was positive. The statement means that the current system can critically evaluate the supplier’s ability to meet the quality specifications. This ability is essential to the classification through registration and evaluation of supplies because it ensures that the supplies that will be availed for use are usable and will offer maximum value to the organization.
3.6 Ethical Soundness
The organization existing system has a relatively effective ability to evaluate the ethical soundness of the supplier. Therefore, this implies that the organization considers ethical standards that promote a good relationship between all the stakeholders. As such, this helps the organization classify the supplier in their ability to uphold the ethical views of the organization and promote a good reputation of the company.
3.7 Overall
Considering all the responses, the organization supplier registration and evaluation system score averagely. This is from a combination of all the measures that were considered. As such, this collaborates with the expert opinion thus evidencing the inadequacy of the current system. The rate calls for improvement of the current system.
3.8 Current System
The organization is using a manual system. The system provides for the documentation of all the suppliers. However, the system lacks the comparative framework in which evaluation is conducted. As such, this implies that the system is mainly used to register the potential supplier, but not evaluate them. Therefore, supplier evaluation is only conducted when the need arises which makes it hard for the organization to have an in-depth understanding of the suppliers. The situation makes it imperatively difficult for the customer to evaluate the supplier improvement which is an essential aspect of an effective supplier registration and evaluation system. Also, evaluation is tedious since it involves a manual comparison of all the registered suppliers. As such, this creates room for mistakes and corruption in the evaluation process. Moreover, large piles of registered suppliers are evaluated since the classification framework is not well established. The practice is wasteful since it involves doing the same work again when a new supplier is being sorted. The action kills the morale of the procurement workers since they feel as though their work is not recognized adequately thus they are required to conduct the exercise repeatedly. Consequently, this situation reduces their productivity in the organization.
3.9 Benefits of using Supplier Registration and Evaluation System
In a situation where a company does not know the underlying facts relating to the supplier performance, supplier management is entirely based on assumption and speculations. Therefore, a supplier registration and evaluation system ensures that the organization can measure supplier performance hence improve the performance visibility. Consequently, the organization will select suppliers on the ability to meet performance goals that are beneficial to the organization supplier management process.
• Detect and Eliminate Hidden Waste and cost Drivers in the Supply Chain
The supply chain is usually marred with inefficiencies that can be done away with through adequate communication between the supplier and the customer. Moreover, some of these inefficiencies totally fall on the supplier side due to the supplier poor business practices that will result to late deliveries, low quality, and inventory mismanagement and high costs among others. Therefore, inefficiencies on the supplier side can easily be mitigated by use of supplier registration and evaluation system. The objective will be realized through adequately understanding the supplier through evaluating them. As such, this necessitates the application of supplier registration and evaluation system where such information about supplier can easily be obtained.
• Leverage the Supply Base
Leveraging the supply base implies the ability to set and implement the minimum threshold to be meet by the suppliers. Therefore, in order to set a minimum threshold, the organization will have to analyze its supply needs then establish the minimum supplier ability and capacity than can meet such needs. Moreover, this will further ensure that the organization plays fair in relation to the competition between the local and offshore suppliers due to the differences in costs. As a result, setting a supplier registration and evaluating system that has this capacity will be instrumental to the organization since it will be guaranteed of fairly treating the two types of supplier and setting reasonable thresholds that are convenient for both the organization and its suppliers. Consequently, this eliminates instances of over expectation from the organization.
• Aligning Customers and Supplier Business Practices
It is common practice for suppliers to run their business aligned to their customers such as sharing the same ethics, showing commitment to continued improvement and expecting similar standards. Therefore, the application of the supplier registration and evaluation system boosts the organization ability to critically evaluate the extent of alignment of the supplier to the business. Therefore, categorization will be based on the extent of alignment so as to avoid conflict of ideologies and guiding principles.
• Mitigating Risk
The ability of the organization to have insights to the supplier business practices and performance serves to reduce business risks especially when an organization highly depends on key suppliers. In this case, the risks may be operational and financial which are worsened by the geographical distance. The installation and usage of supplier registration and evaluation risk will be instrumental in mitigating such risks. The ability will be founded on the fact that such a system can profile and categories supplies such that the key supplies have to meet high end expectation.
• Improve Supplier Performance
The sole goal of supplier registration and evaluation is to improve the supplier’s performance. Although measuring the supplier performance may yield positive feedback, evaluation is more useful since it aims at establishing an improvement culture since evaluation is comprehensive and continuous as opposed to instantaneous. Therefore, this system will highly consider the traditional aspects such as quality, delivery and cost management. Also, the system reaches out to understand the qualitative aspects of the supply chain which are usually the underlying factors. However, it is usually difficult to understand the underlying factor since it requires a comprehensive understanding of cultural factors, business practices and leadership of the supplier. Therefore, the customer should engage in follow-up activities that can be generated from the finding obtained from the supplier registration and evaluation system so as to assist the supplier makes the desirable improvement.
• Needed Resources
Currently, the organization lacks a comprehensive and automated supplier registration and evaluation system. Therefore, this implies that the organization needs an overhaul of the current system. As such, this means that large financial resources need to be invested in the project. The investment is large because the system will be developed from square one since no other system of its kind existed. Also, the organization lacks the technical expertise necessary to develop such a system making it entirely rely on outsourcing services from business that specialize in system development. In addition, the current human resource assigned to a procurement lacks the necessary expertise to effectively operate the system. The situation calls for more investment in training and recruiting adequate personnel to operate the system in order for the firm to realize the best objective. Moreover, since the organization will recruit or allocate additional staff to procurement, it implies more work hours will be available. As such, the organization will have made adequate investment in the additional hours that will be available in the procurement department.
3.10 Impact on Efficiency
The ability to have adequate visibility into supplier operations, detecting and eliminating hidden costs, risk reduction, improved competitive advantage though reduction in order cycle, leveraging the supply base and customer-supplier practice alignment are the major advantages of having a supplier registration and evaluation system. The advantages outline help in understudying how the implementation of the supply registration and evaluation system will be instrumental in improving on the customer’s efficiency. Therefore, since the system will help map out the best suppliers in relation to the eight discussed aspects, the customer enjoys the high rate of continuity in his business process. The state is realized since the organization supply system ensures that inputs are available as and when needed by the production department. Consequently, this eliminates costs that are associated with stock outs, delayed deliveries and poor quality supplies that fail to meet the production requirements. As such, efficiency is achieved through the uninterrupted flow work that is facilitated by the installation of the automated supplier registration and evaluation system.
