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Criteria and Methods in Finding Suppliers

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Criteria and Methods in Finding Suppliers

Selecting a supplier is one of the company's operational decisions taken in goods shopping activities. The company's procurement activity for goods shopping has an essential value because the purchase of components, raw materials, and supplies represents the quality or quality of the finished product.

Finding and selecting suppliers must do it carefully because choosing the wrong supplier will disrupt the production process and company operations.

In choosing suppliers, decision-makers need analysis tools and mapping supplier selection criteria. Thus enabling them to solve complex problems so that the decisions are taken to help get reliable suppliers.

Supplier Selection

In today's competitive business competition, it is challenging for companies to successfully produce goods at low costs and produce quality products without a satisfactory supplier.

Most companies choose to find suppliers of production materials rather than make them themselves. In the process, selecting a supplier requires several considerations such as supply availability, delivery costs and performance, and the supplier's quality.

The selection of competent and appropriate suppliers is an essential factor affecting the buyer-supplier relationship. Suppose selecting and maintaining relationships with suppliers is carried out correctly. In that case, it will quickly achieve higher product quality and good partner relationships.

Hopefully, the supplier can provide quality products or services at the right price, in the right amount, and at the right time.

Supplier Selection Criteria

The decision to choose a supplier is not an easy thing. The buyer must ensure that the supplier meets the criteria that have been set. 

The following are some criteria that can use in selecting suppliers:

a. Quality

The sub-criteria in the quality criteria include:

  • Conformity of goods with predetermined specifications
  • Provision of goods without defects
  • Ability to provide consistent quality

b. Prices

Included in the sub-criteria in the price criteria are:

  • Appropriateness of the price with the quality of the goods produced
  • The ability to provide discounts (discounts) on orders in a certain amount

c. Customer Care Services

The sub-criteria in this criterion are:

  • Ease of contact
  • Ability to provide information clearly and easy to understand
  • Speed ?? in responding to customer requests
  • Quick response in resolving customer complaints

d. Quantity Accuracy

The sub-criteria in this criterion are:

  •  Accuracy and appropriateness of quantity in delivery
  •  Conformity of package contents

e. Delivery

Accuracy Delivery Criteria, which include:

  • Ability to deliver goods according to the agreed date
  • Knowledge in terms of handling the transportation system

Sometimes the above criteria conflict with each other when in the field. For example, a supplier prefers to offer goods at a lower price, but the quality is below average. Meanwhile, other suppliers offer goods of good quality with uncertain delivery.

However, it is difficult for companies to find suppliers who can meet all of the criteria above. Still, at least the company can discover optimal suppliers to meet the requirements.

Many things must be considered and done by companies in choosing suppliers, namely as follows:

  • Determine and formulate decision criteria.
  • Pre-qualification (initial screening and preparing a shortlist of potential suppliers from a list of suppliers/suppliers).
  • Selecting the final supplier (fixed).
  • Monitoring selected suppliers, the intention is to conduct continuous evaluation and assessment.
  • The supplier selection method
  • The method of selecting suppliers in the procurement of goods is generally carried out through public auctions. 

Can make Additional selections through limited tendering, natural selection, direct appointment, procurement card, electronic procurement, or self-management. 

The following is an explanation:

1. Public

A public auction is a method of selecting suppliers conducted openly to the public.

It refers to the basic principles of supply chain management by being announced in advance through official bulletin boards such as through print and electronic media.

2. Limited Tenders 

Limited tenders are carried out by inviting suppliers through announcements with a minimum of two potential participants who meet specific criteria.

3. Direct

Election Direct election is the implementation of procurement of goods by inviting at least three suppliers of goods.

4. Direct Appointment

The selection of suppliers by direct appointment is carried out by pointing directly to one supplier of goods.

5. Procard

The method of selecting suppliers using procurement cards is the selection of supplier goods/services with the direct designation.

The process uses the pro card media to make payment without issuing a letter of agreement/contract, order letter, or purchase order.

6. Electronic Procurement

The method of selecting suppliers using electronic procurement is procuring goods/services from suppliers using electronic networks or electronic data exchange.

7. Self Management

The method of selection using self-management is the selection and purchase of goods from suppliers that are already planned.

The process is carried out using its personnel and equipment and supervised by itself or other parties authorize its implementation.

Thus an explanation of how to choose a supplier by looking at several criteria that must consider. The selection of the right supplier will facilitate the company's production process. 

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