Supplier Management Portfolio Section 1 2
Key performance indicators for suppliers: 2
Terms and conditions template: 2
Supplier Management Portfolio Section 2 3
Delivery of goods: 3
Receiving of goods: 3
Damaged goods: 3
Disputes and Arbitration: 3
Supplier Management Portfolio Section 3 4
Supplier assessment procedure: 4
Review of outcomes 4
Recommendation of supplier 5
Supplier Management Portfolio Section 1
Key performance indicators for suppliers:
A number of key performance indicators are going to be used for suppliers to the company. Savings is the first key performance indicator for suppliers wishing to work with the company. Savings will be calculated as the amount of money saved by the company as a result of working directly with the supplier. Cost avoidance is the second key performance indicator for suppliers working with the company. Cost avoidance is measured by the amount of savings made as a direct result of the processes implemented by the supplier. Purchase price variance is the difference between the price that a commodity is purchased and its actual value. Purchase price variance is going to be a key performance indicator for suppliers with those keeping the variance as low as possible while offering the best services standing a better chance. The last key performance indicator is going to be supplier performance. This will be based on results from previous work carried out with the company in addition to reports from other industry stakeholders. Supplier performance includes variables such as quality of products delivered, timely delivery of products, and flexibility of the supplier and capacity of the supplier.
Strategies that will be used to ensure good relationships are built with suppliers include systematic collaboration and supply relationship management. In order for a company to ensure that it is able to work with its suppliers well, it must ensure that good working relationships are cultivated with suppliers. There are a number of strategies that can be employed to make this happen. Systemic collaboration is one of the strategies that can be employed by the company to ensure that it cultivates a good relationship with the suppliers. Majority of the company’s products are manufactured using barley. This product is sourced from local farmers. Systemic collaboration allows the company to work together with the farmers who supply the company with its raw material.
The collaboration focuses on how both the company and the suppliers will benefit from the relationship. For example, it can be a venture where the company develops a high yield variety of the crop, which is then given to farmers. The suppliers get higher output and the company is assured of delivery of its raw material throughout. Supply relationship management is another strategy that can be employed by the company to cultivate a good relationship with suppliers. Each supplier is given an account and an individual within the company is assigned to each account. With the help of technology, the account can capture details of each supplier making it easier to track their activities. This is very useful in solving problems that are likely to occur within transactions.
Terms and conditions template:
Any new supplier to the company is expected to provide quality products, ensure efficient and timely delivery and always comply with the terms and conditions set out for each supply contract. In addition to these requirements, suppliers of the company need to conduct environmentally sustainable business as well as ensure fair trade. Failure to meet the terms and conditions set out may result in cancellation of the contract. It is important for suppliers to note that the company is held in high regard in the public and our suppliers must play their part in ensuring this image is not tarnished.
Any new supplier must also provide the following information:
Business name of the supplier
Physical address of the permanent offices of the supplier
Tax compliance certification
Suppliers who have worked with the company in the past are required to keep their information updated and furnish the company with the necessary documents as required.
Evaluation template
The procurement manager must fill the following evaluation document for any supplier who passes the first stage of verification. The procurement manager must use the most current information and be unbiased in filling out the document.
What is the reach of the supplier?
Is the supplier competitive in pricing?
What are the payment terms of the supplier?
Is the supplier able to offer after sales service for goods delivered? (Equipment)
How does this supplier deliver goods to premises?
What is the general reputation of the supplier in the public domain?
Does the supplier practise sustainable business?
Is the supplier tax compliant?
What is the general capacity of the supplier?
Has a credit check been performed on the supplier? If so, what are the results?
A copy of the evaluation template has to be filled out for every successful bid by a supplier.
Supplier Management Portfolio Section 2
Delivery of goods:
During delivery of goods from the supplier, the procurement clerk will be in hand to receive the goods. It is the responsibility of the receiving procurement clerk to
Review the items delivered with the goods requested. The review shall consist of assessment of quantity, quality, and the completeness of the order.
Receiving of goods:
The receiving procurement clerk shall also match the delivered goods to the purchase order. In case of any problems with the delivery such as insufficient quality or quantity or incompleteness of order, the receiving procurement clerk shall report to the procurement manager for follow ups. The receiving clerk shall also be responsible for the safe storage of delivered supplies once received.
Damaged goods:
In case of damaged goods, the receiving clerk will decide whether to take custody of the goods or whether to return them. In case the receiving clerk takes delivery, they will record the defects and immediately contact the procurement manager while also sending the delivery person back with the records of defective goods. This will happen when the delivered goods are in form that is usable by the company.
Disputes and Arbitration:
In case of any disputes with any of the suppliers, the company shall inform them in writing through the procurement manager who will be in charge of all supplier accounts. The letter will include a copy of the purchase order and the delivery docket. Included in the letter will be an explanation of the complaint. Investigations into the errors will be conducted in conjunction with a representative of the supplier. The investigation will start within three days of the letter being sent to the suppliers.
The suppliers will always be given the opportunity to make adjustments as well as negotiate with the company. Replacement deliveries will be accepted if they are made within reasonable time. Once a supplier agrees to make a replacement, they will have to ensure that they deliver the correct quality and quantity within the agreed time. Most disputes with suppliers are usually solved by internal dispute resolutions mechanisms. However, some disputes usually have to be solved by an external arbitrator. In rare cases, disputes between suppliers and the company have ended in court.
Arbitration has been the most effective dispute resolution mechanism employed by the company. The company usually honours the determination of arbitrators as final as spelled out in the terms and conditions. This is effective in saving the company time during the resolutions of disputes. Arbitrators will usually resolve a dispute in far much shorter time than a court would take. Use of arbitration also helps to keep the company’s legal matters from the public spotlight because there is potential for negative portrayal.
Supplier Management Portfolio Section 3
Supplier assessment procedure:
Suppliers must meet the minimum requirements outlined in the suppler evaluation template. The supplier must also abide by the terms and conditions given out to suppliers by the company. However, during operations, some suppliers will go above and beyond their responsibility to ensure that they offer the best services to the company. Any suppliers identified to perform above and beyond minimum requirements will be identified for rewards. The evaluation for performance will be based on the key performance indicators as well as other factors.
Suppliers will be graded according to quality of deliveries, timeliness of deliveries, purchase price variance, flexibility among other things. Any problems such as wrong deliveries, late deliveries, missing goods and other similar mistakes will lead to penalization. The supplier will be liable to ensure mistakes are corrected. Assessments will continue throughout the supplier contract period. The contracts of poor performing suppliers which lead to losses can be cancelled by the company at any time. Average performing suppliers will be maintained until the end of the contract period. At this point, alternative suppliers offering better value for the company will be sourced. Suppliers with stellar performances in the supplier assessments will be given first refusal rights in any new contract negotiations. The company will also work with such suppliers to build their capacity to enable better delivery of services to the company in future. This ensures that the suppliers are able to benefit from long term business opportunities with the company which are more lucrative in the long run.
Review of outcomes
National bottlers
Review of outcomes
The company would like to communicate that the tenders for supply have been reviewed successfully for the first stage. Your company was able to meet the minimum requirements for our suppliers and we are pleased to inform you that your company has been successful.
Further communication from our company will be received from the procurement manager. You will be sent a copy of our terms and conditions for suppliers. Any clarifications will be made on request. We look forward to working with you.
Procurement manager
Recommendation of supplier
Recommendation of supplier
The procurement department has successfully completed the review of tenders for the supply of bottling equipment. Out of the seven bids received, three were able to satisfy all our requirements. Out of the three, national bottlers was the most impressive. The company was able to meet the minimum requirements for our suppliers as shown in the attached suppler evaluation documents. We have also had the privilege of working with the company on previous occasions and the company has always delivered. I therefore recommend that National bottlers be the suppliers for the new equipment needed.
Procurement manager
