Supplier development is the core of the procurement system, and its performance is also related to the performance of the entire procurement department. Generally speaking, supplier development should first confirm whether the supplier has established a set of stable and effective quality assurance system, and then confirm whether the supplier has the equipment and process capabilities to produce the specific products required. Next is cost and price. Value engineering methods should be used to analyze the cost of the products involved and achieve cost savings through win-win price negotiations. In terms of delivery, it is important to determine whether the supplier has sufficient production capacity, whether human resources are adequate, and whether there is any potential for capacity expansion. The last point, which is also very important, is the supplier's track record of pre-sales and after-sales services. Specific steps are as follows:
1. Competitive analysis of the supply market
What is the current market development trend, the major suppliers in the market positioning, so as to have a general understanding of potential suppliers. Then the required products according to the ABC classification method to find out the key materials, ordinary materials and general materials, according to the importance of materials to determine the degree of supplier relations.
2. Finding Potential Suppliers
After careful analysis of the market, suppliers can be found through the previously mentioned sources of supplier information. Among these suppliers, after removing those that are clearly unsuitable for further cooperation, a list of suppliers to visit can be derived.
3. Site visits to suppliers
Invite the quality department and process engineers to participate in the supplier site visits together, they will not only bring their professional knowledge and experience, **** the experience of the same audit will also help the internal communication and coordination.
During the site visit, a uniform scoring standard should be used to evaluate and focus on the audit of their management system, such as work instructions and other documents, quality records, etc. Importantly, there are also sales contract reviews, supplier management, training management, equipment management and measurement management. During the inspection, it is important to communicate with team members in a timely manner, listen to the supplier's strengths and weaknesses, and listen to the supplier's explanation. If the supplier has the intention to improve, the supplier can be asked to provide a report on improvement measures for further evaluation.
4. Inquiry and quotation to suppliers
An inquiry document is issued to qualified suppliers, which generally includes details such as drawings and specifications, samples, quantities, approximate purchasing lead time, and required delivery date. Upon receipt of the quotation, its terms and conditions are carefully analyzed, any doubts in it are thoroughly clarified, and records are made accordingly, including faxes and e-mails. Based on the large amount of information in the quotes, conduct quote analysis, compare quotes from different suppliers and select the supplier with the right quote.
5. Contract Negotiation
Negotiations are conducted with suppliers who have quoted the right price, volume of products, lead time, quick response time, changes in supplier costs and liability compensation. Each supplier is an expert in his field, more listening to the supplier's advice will often have unexpected gains. There have been suppliers to take the initiative to recommend alternative raw materials, such as the use of Korean steel instead of Swiss products, the cost savings of up to 50%, and performance to fully meet the requirements, which is relying solely on negotiation can not be achieved by the price reduction.
6. Identify suppliers
Through strategic alliances and participation in design, suppliers can effectively help us reduce costs. There is also a very important aspect of hidden costs. Purchasing cycle, inventory, transportation, etc. are invisible costs, to include suppliers with the conditions of just-in-time delivery system to minimize inventory and reduce the total cost of the company.