Supplier Selection and Evaluation

Good Supplier Selection

To value and compare:

• Qualities
• Prices
• Discounts
• Terms
• Cost of Transportation
• Packaging
• Payment
• Customer Service
• Long-term Relationship Potential

Supplier Comparison Table

Prepare a comparative table showing all offers:

• Prices
• Quality
• Payment Terms
• Delivery
• Discounts
• Etc.

Importance of Transportation

Transportation is important because it involves the transfer of goods. Consider freight costs (noli), freight services, and insurance, especially for expensive products, to ensure their safety and potentially save costs.

Managing Long Delivery Times

Regarding delivery: If payment is late, the seller typically has the right to charge interest. Payment is normally due fifteen days after delivery of the product, allowing the buyer time to verify it.

Warranties

Warranties are important because they provide security for both the customer buying goods and the supplier.

Required Supplier Information

Supplier file information needed:

• Item name and code
• Supplier name and code

Select suppliers by priority and comment on their sales features. This information helps in selecting several suppliers, managing deliveries, and preventing stock breakdowns.

Comparing Suppliers Graphically

It is common for firms to compare suppliers graphically to:

• Set prices
• Establish agreements on discounts
• Define terms and conditions of carriage
• Specify containers and packaging

Types of Discounts

• Seasonal
• Promotional
• Volume
• Immediate Payment

Evaluating Quality

Evaluate quality using:

• Studies and samples
• Technical characteristics
• Operational testing

If quality is equal, select based on the best price.

Evaluating Service

Evaluate service based on:

• Delivery performance
• Customer service and support
• Warranty periods
• Supplier prestige
• Product acceptance in the market
• Financial stability (avoiding bankruptcy, suspension of payments)
• History of delivery failures

Post-Selection Process

The process after selection involves negotiating agreements. It is necessary to officially assess and confirm that the agreed conditions are true.

Prepayment Before Delivery

Prepayment before delivery can help secure favorable conditions regarding the goods with the supplier. Discuss costs with the provider, including product cost, insurance, and overall value.

Insurance Considerations

Insurance is the equitable transfer of the risk of a loss from one entity to another in exchange for payment (premium).

Understanding Incoterms

Incoterms are international rules accepted by governments involved with international freight, establishing criteria for trade terms.