Buyers selecting suppliers to establish strategic partnerships, controlling relationship risks between the two parties, and developing dynamic supplier evaluation systems are several issues that Chinese buyers are generally concerned about. As the proportion of procurement to sales revenue continues to grow, procurement has gradually become a key factor in determining the success or failure of electronics manufacturers. As the basis and prerequisite for the normal operation of the supply chain, supplier evaluation and selection is becoming the hottest topic among enterprises.
Different companies at different stages of development have different selection and evaluation indicators for suppliers. So how can we objectively evaluate and select suppliers through quantitative indicators? The basic ideas are: staged continuous evaluation, network management, key point control and dynamic learning process. These ideas are reflected in the establishment, operation and maintenance of the supplier evaluation system.
1 Establish a staged supplier evaluation system
Adopt a staged continuous evaluation method and divide the supplier evaluation system into supplier entry evaluation, operation evaluation, supplier problem guidance, Improve several aspects of evaluation and supplier strategic partnership evaluation. The selection of suppliers is not only a selection of shortlisted qualifications, but also a continuous and cumulative selection process.
To establish a supplier entry evaluation system, you first need to conduct on-site review and synthesis of seven aspects: supplier management system, resource management and procurement, product realization, design and development, production operation, measurement control and analysis improvement. Analyze the score. The degree of satisfaction with the above items is divided into 5 score segments (ranging from 0 to 100) from not meeting the requirements to fully meeting the requirements and the results are satisfactory. The average score is calculated based on each sub-item. For example, a supplier with a score of 80 or above is a system-qualified supplier, a score of below 50 is a system-unqualified supplier, and a score of 7950 is a continuous assessment supplier that needs to be discussed and determined based on the specific situation. Qualified suppliers enter the company-level **L maintenance system.
To establish a supplier operation evaluation system, daily performance tracking and periodic evaluation methods are generally adopted. The QSTP weighting standard is adopted, that is, Quality of supply (35 scoring proportion), Service (25 scoring proportion), Technology (10 scoring proportion), and Price (30 scoring proportion). Based on relevant performance tracking records, we conduct comprehensive assessments of suppliers' performance on a quarterly basis. The annual assessment will conduct a comprehensive evaluation based on the time when the supplier entered the **L system.
The guidance and improvement work on supplier issues is achieved through special group counseling and result tracking. The procurement center has a supply development group. According to the characteristics of the purchased materials, the supply development team members are divided into several groups, such as board group, mechanical peripheral group, device group, packaging group, etc. One of the responsibilities of this group is Coach and follow up with suppliers.
The supplier strategic partnership evaluation adopts a classified management method for the supplier's cooperation strategy through the supplier's entry and process management. Based on the information collected, the procurement center will analyze and discuss it with a specialized business group, determine the relationship evaluation related to establishing long-term partners, and submit it to a specialized strategy group for analysis. Partnership is not an all-encompassing, full-featured general strategy, but a selective strategy. Whether and when to implement a partnership requires a thorough risk and cost analysis.
The phased evaluation system is characterized by transparent processes and open operations. The establishment, revision and release of all processes are carried out through certain control procedures to ensure relative stability. Evaluation indicators should be quantified as much as possible to reduce subjective interference factors.
2 Reflect network management
Network management mainly refers to the management method of connecting different information points into a network in terms of coordination of management organization structure. The procurement platform in a multi-business unit environment needs to meet the procurement needs of different business units, and the differences in needs must be unified into a unified system with higher adaptability. For the certification of new suppliers, the company-level quality department and procurement center should be responsible for the review of the supplier system; for product-related differential needs, the quality department and R&D department of each business unit should put forward clear requirements.
Establish a review team to control and implement supplier evaluation. The team members are composed of supplier management engineers from the procurement center, company quality department, and business unit quality department, including R&D engineers, relevant expert consultants, quality inspectors, production personnel, etc.
The review team takes the overall interests of the company as its starting point and is independent of individual business departments. Team members must have teamwork spirit and certain professional skills.
Networked management is also reflected in the objectivity of business and the execution supervision of processes. The supervision mechanism is reflected in all aspects of work, and human factors should be reduced as much as possible, and the transparency and institutionalization of the operation and decision-making process should be strengthened. You can establish a business management committee and adopt ISO9000 audit methods to check the compliance with the procedures of various businesses within the procurement center.
3 Four Principles of Key Point Control
Key point control includes the principle of equal match, the principle of half ratio, the principle of quantity control of supply sources and the principle of supply chain strategy.
The principle of equal match embodies a reciprocal management idea, which is not inconsistent with the cooperation theory of "the person who is close to the best is the best". In the non-monopoly supply market, due to the different management levels of suppliers and the depth of implementation of supply chain management, priority should be given to suppliers of comparable size and level. The industry leader may not necessarily be the preferred supplier. If the size difference between the two parties is too large and the procurement ratio is too small in the supplier's total output value, the purchaser will often struggle with production scheduling, after-sales service, consistency, and negotiation power comparison, etc. Unsatisfactory in aspects.
From the perspective of supplier risk assessment, the half rule requires that the purchase quantity cannot exceed 50% of the supplier's production capacity. If only one supplier is responsible for 100% supply and 100% cost sharing, the buyer will be at greater risk, because once there is a problem with that supplier, according to the development of the "butterfly effect", it will inevitably affect the normal operation of the entire supply chain. Not only that, buyers also need to consider geographical risks when they are dependent on certain supplied materials or products.
The principle of quantity control of supply sources means that the number of actual suppliers should not be too many. It is best to keep the number of suppliers of similar materials at 2 to 3, divided into primary and secondary suppliers. This can reduce management costs and improve management effects, ensuring the stability of supply.
To establish a long-term cooperative relationship in the supply chain of trust, cooperation, and open flow with suppliers, buyers and suppliers must first analyze the market competition environment. By analyzing the current product demand, product types and characteristics, confirm whether it is necessary to establish a supply chain partnership. For an open and fully competitive supplier market, the principles of comparing prices with multiple suppliers, controlling quantity, and shortlisting the best can be adopted.
In markets with limited competition and monopolized supply markets with only a few suppliers to choose from, buyers need to adopt the principle of strategic cooperation to obtain better quality and closer relationships. Partnerships, better scheduling and lower costs and more support.
For suppliers that implement strategic long-term partnerships, a "package agreement/contract" can be signed. After establishing a supply chain partnership, it is necessary to confirm whether the supply chain partnership needs to change accordingly based on changes in demand. Once a problem with a supplier is discovered, the supply chain strategy should be adjusted in a timely manner.
Supply chain strategic management is also reflected in another aspect: careful analysis and handling of the relationship between short-term and long-term goals, short-term and long-term interests. Based on long-term goals and long-term interests, buyers may choose some suppliers that appear to be harsh and expensive on the surface, but in fact they give up short-term interests and actively choose a supply chain composed of excellent elements. (To be continued)
4 System Maintenance
The operation of the supplier management system requires different detailed evaluations according to different industries, enterprises, product needs and competitive environments. The refined standards themselves are a manifestation of flexibility. Short-term competitive tendering and long-term contracts and strategic supplier relationships can also coexist.
Through continuous learning and improvement, a learning organization needs to constantly update its supplier selection and evaluation, evaluation indicators, benchmarking objects, and evaluation tools and techniques.
As a function, the development of procurement is related to the overall management structure and management stages of manufacturing enterprises. Purchasing requirements and strategies need to be continuously adjusted according to the company's overall strategy, and the same applies to the principles and methods of supplier selection.
5 Ten Principles for Supplier Selection
General Principles - Comprehensive, Specific and Objective Principles: Establish and use a comprehensive supplier comprehensive evaluation index system to evaluate suppliers. Provide comprehensive, specific and objective evaluation. Comprehensively consider the supplier's performance, equipment management, human resource development, quality control, cost control, technology development, user satisfaction, delivery agreements and other aspects that may affect the supply chain partnership.
Principle of system comprehensiveness: the establishment and use of a comprehensive systematic evaluation system.
Concise and scientific principles: supplier evaluation and selection steps, and the selection process should be transparent, institutionalized and scientific.
Principle of stable comparability: The evaluation system should operate stably, have unified standards, and reduce subjective factors.
Principle of flexible operability: Supplier evaluations should be different in different industries, enterprises, product needs, and environments, and a certain degree of flexibility should be maintained.
Principle of equal match: the size and level of the supplier are equal to that of the purchaser.
Half proportion principle: the purchase quantity does not exceed 50% of the supplier's production capacity, and suppliers who supply the full supply are opposed.
Principle of quantity control of supply sources: The number of suppliers of similar materials is about 2 to 3, divided into primary and secondary suppliers.
Supply chain strategic principles: Develop supply chain strategic partnerships with important suppliers.
Learning update principle: Evaluation indicators, benchmarking objects, and evaluation tools and techniques all need to be constantly updated.