Ray Carter’s 10 C’s of Supplier Selection Supplier Evaluation Selection Criteria Procurement Cycle, Henry Ford of Quality Quote Tender/Bids Ethics

1. S
QUESTION:
• Discuss How Organisational Buyers Evaluate Potential
Suppliers.
TITLE
Supplier Evaluation Selection
PRESENTED BY
Sinqobile Ndebele L013-0961R
&
Sibonginkosi Ndhlovu L013- 1354J Supplier Selection
12 March 2017

2. CONTENT
• Supplier, Buyer Supplier Evaluation Definition.
• Brainstorming Exercise.
• Approaches to supplier evaluation.
• Importance of Suppler Evaluation.
• Mitigate Risk.
• Supplier Evaluation Selection Process and Criteria.
• The Procurement Cycle.
• Carter’s 10 C’s of Supplier Selection.
• Real World Example.
• Tender/Bids.
• Bonus – Ethics.
• References.
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3. Supplier Evaluation
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4. Supplier: “External entity that supplies relatively
common, off the shelf, or standard goods or
services” (Business Dictionary)
A supplier is a business or individual that
supplies one’s business with products or services
that one uses in his or her business. For example
for chicken inn, some of its suppliers could be a
broiler company(supplying with chicken, the
electricity company supplies with electricity.
Supplier Defined
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5. Broiler as a Supplier
Chicken Inn Logo Chicken Inn Suppliers
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6. Supplier Selection Definition
• Supplier Selection: “The stage in the buying process when
the intending buyer chooses the preferred supplier or
suppliers from those qualified as suitable.” (Westburn
Dictionary)
• Sherry Gordon (2008) states that supplier evaluation is
also a process applied to current suppliers in order to
measure, monitor their performance for the purposes of
reducing costs, mitigating risk and driving continuous
improvement. Thus one can then argue that supplier
evaluation is a comprehensive model used to minimize
the risk associated with quality and delivery
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7. • Why is supplier selection so important to
your organization?
• What can result to your company by having
the incorrect supplier?
• What is important to you when finding a
supplier?
Brainstorming Exercise
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8. APPROACHES TO SUPPLIER EVALUATION
• CONFERENCE ROOMS
• SITE VISITS
• USING THIRD PARTY EVALUATORS
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9. Conference rooms
Face to face discussion can help clarify
specifications and determine whether a
supplier can meet the demands of a
complex purchase
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10. Site visits
Many suppliers look good on paper,
but visiting a site can help
determine whether there are
inefficiencies
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11. Third Party
Evaluators
Trained third party organisations are
often hired to evaluate and audit
suppliers Resource intensive
• Requires trained personnel
• Involves surveys
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12. Importance of Supplier Evaluation in
Business
Increase Performance Visibility
When companies do not know the facts about their
suppliers, supplier management tend to be based on
guesses. evaluating suppliers helps to improve
performance and meet the goals of the organisation thus
increasing the performance visibility.
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13. Mitigate Risk
• Insight into supplier performance and business
practices helps to reduce business risks. Those
risks can be financial or operational
Align Customer & Supplier
Business Practices
• Suppliers should run their business in alignment
with their customers, they can share same
business ethic and expect similar standards of
excellence as well as showing commitment to
continuous improvement.
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14. Supplier Evaluation Selection Criteria
• Competitive pricing
• Ability to meet specifications and standards
• Product and service quality
• Product yields and durability (food)
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15. The Procurement Cycle
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16. Ray Carter’s Key to
Successful Evaluation
Ray Carter director
of DPSS Consultants
first outlined his
seven Cs of supplier
evaluation in a 1995
article in
‘purchasing and
supply
management’ and
later added new Cs
to the model.
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17. Carter’s 10 C’s of Supplier Selection
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• Competency
• Capacity
• Consistency
• Control of Process
• Cost/Price
• Commitment to
Quality
• Cash/Finances
• Clean
• Culture & Relationships
• Communication
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18. Competency
• Looking at how competent the
supplier is, in what they do?
• Do they possess the needed skills i.e.
Building Project, Accounting and
Auditing
• Supplier's capabilities measured
against your needs
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19. Capacity
• The supplier needs to have enough
capacity to handle your firm's
requirements.
• Does it have the resources to meet
your needs, particularly when
commitments to other clients are
considered?
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20. Consistency
• Expect the supplier to deliver exactly
what you want every time. If it is not
exactly what you want, it should be
exactly what you require.
• The supplier needs to be consistent
with timing and quality issues.
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21. Control of Process
• Query how much control this supplier has
over its policies, processes, procedures, and
supply chain.
• How will it ensure that it delivers consistently
and reliably, particularly if it relies on scarce
resources, and particularly if these are
controlled by another organization?
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22. Cost/Price
• It is vital to look at the cost of the product that this
supplier provides.
• How does product compare with the other firms
that you're considering?
• Most people consider cost to be a key factor when
choosing a supplier. However, cost is in the middle
of the 10 Cs list for a reason:
• Other factors, such as a commitment to quality and
financial health, can potentially affect your business
much more than cost alone, particularly if you will
be relying on the supplier on an on-going basis.
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23. ‘’Quality means doing it right even if
nobody is looking’’ Henry Ford
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24. Commitment to Quality
• The supplier needs to provide evidence that it's
committed to high quality standards. Where
appropriate, look for quality initiatives within the
organization, such as ISO 9001, SAZ and Six Sigma .
• The supplier also needs to show that it is committed
to your Company, as a customer, for the duration of
the time that you expect to work together. (This is
particularly important if you're planning a long-term
relationship with the supplier.)
• You'll need evidence of its on-going commitment to
delivering to your requirements, whatever the needs
of its other customers.
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25. Look at what happened at Nandos building in
Bulawayo btwn 7th & 8th Jason Moyo
This has led to speculations on the quality of
workmanship as well as health and safety
concerns ~
To all Stakeholders
Involved.
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26. Cash/finances
 Read the Supplier’s financial reports,
look deeper than the numbers.
 Your supplier should be in good
financial health. Cash-positive firms are
in a much better position to weather
the ups and downs of any uncertain
economy.
 Does this supplier have plenty of cash
at hand, or is it overextended
financially? And what information can
the supplier offer to demonstrate its
on-going financial strength?
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27. CLEAN
• Make sure that their buildings and products are clean
and sanitary.
• By clean; Carter means that you want to make sure that
the products the supplier uses are not controversial,
dangerous, or tampered with in any way.
• For example, if you are Nike and you are having a
company make your shoes you will want to make sure
you are not using sweat shops somewhere along the
supply chain. If you are a toy company and you buy your
toys from China you will want to make sure that the toys
are not painted with lead paint.
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28. Comparison or two Suppliers in the
Beef Industry
Dirty Environment Clean and up to Standard
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29. Culture and Relationships
• The best business relationships are based on
closely matching workplace core values . This
is why looking at the supplier's business
culture is important. For example, what if
your organization's most important value is
quality, and your main supplier cares more
about meeting deadlines? This mismatch
could mean that it's willing to cut corners in a
way that could prove to be unacceptable to
you.
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30. Communication
• This goes a lot with culture and relationships.
• It actually goes well with the other 9 C’s.
• Does the supplier have the technology to stay
in communication with you?
• How does the supplier communicate?
• How often does the supplier communicate?
• Are they willing to give proprietary
information?
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31. In short we are saying
If you use Ray Carter’s Key to Successful
Evaluation you will never go wrong
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32. Real Life Examples
• How companies or organisations
deal when buying
• Pertaining to big projects or day
to day buying by companies and
organisation
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33. In Short
• For Day to day Orders i.e. Stationary & Cleaning
material, in a formal organisation the buyer is
required to request from three (3) reputable
suppliers.
• A quotation from the supplier, a price list,
samples of products for testing if there are there.
• After choosing the one appropriate supplier
follows all types of trading letters.

34. Where it Involves a Tender/Bids
• An invitation to tender must be published
depending on weather its open or advertised to
all vendors or contracts, then there are
restricted tenders to selected prequalified
vendors or contractors
• Notice and Invite is at least 30-35 day
calendar, no longer than 12 months. 15 calendar
days if a Prior Information Notice (PIN).
• A tender must be enclosed in a double envelope
system.
• Shortlisting for suitable vendors starts after the
selection criteria.
• Their sales pitch.
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35. BONUS
• Our Bonus in Conclusion Outside Carter 10Cs is about:
• ETHICS: What is right and good or wrong and bad in any
given situation” (Northhouse P.G. (2013).
• Ethics – are the moral principles governing or
influencing conduct. In Zimbabwe there is the Chartered
Institute of Procurement and Supply (CIPS) code of
conduct for reference.
• It involves principles such as fairness, trust integrity,
honesty, cultural respect, and transparency – upholding
the Organisation’s standards and policies and all
relevant legislation. Buyers and Suppliers have to know
their code of conduct and practice it (implement it).
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36. REFERENCES
All information used for this presentation is based from information from the following sources:
• Fuller, Neil. “How Many C’s in Partner?” All Business. Supply Management, 8 Sept. 2005. Web.
5 April 2010.
• Hadaway, Jordon. “Supplier Selection.” 12Manage The Executive Fast Track. 12Manage. 6
January 2010. Web. 7 April 2010.
• “Home: Sourcing Platform MFG.com Launches India Operations.” NetIndian, 3 April 2010.
Web. 8 April 2010.
*** Photos, pictures, diagrams were adapted from
• https://www.google.co.zw/search.pictures
• https://www.google.co.zw/imgres?imgurl
• Ray Carter, Practical Procurement", "Practical Contract Management" and "Stores and
Distribution Management" and creator of the 10 (c) model.
• © iStockphotovm
• “Supplier.” Business Dictionary. Online Business Dictionary, 2010. Web. 5 April 2010.
• “Supplier Selection.” Westburn Publishers. The Westburn Dictionary of Marketing, 2002. Web.
5 April 2010.
• Oxenbury, Alan. “Making the Right Choice.” Supply Management. Supply Management, 20
July 2006. Web. 6 April 2010.
• Oxenbury, Alan. “The Final Countdown.” Supply Management. Supply Management, 3 August
2006. Web. 6 April 2010.
• Wallin, Cynthia. “Supplier Selection.” Brigham Young University. Microsoft PowerPoint file. 9
February 2010.
36

37. PRESENTED BY
Sinqobile Ndebele L013-0961R
&
Sibonginkosi Ndhlovu L013- 1354J
37
2 March 2017