Supplier selection

The stages of supplier selection

Supplier selection is the process by which the buyer identifies, and evaluates the ability and proportionality of suppliers, then chooses those who offer products or services that match or exceed the needs of the business, selecting can be either at tactical and operational or strategic levels.

Supplier selection in public procurement process.

Public sector environment is largely based on legislation, policy, and procedures in openness and transparency as well as ensuring equity and fairness and operate within range of regulations, policies estimated to accomplish broad government goals, governments are obliged to disclose purchasing and contracting information to the public including details about the outcome of government contracting decisions.

Supplier selection is based on overall value for money whilst price is not important in public sector procurement always consider quality, reliability, safety, good design, timely delivery, and social, economic and environmental aspects of sustainability, where the value is high enough to justify the cost.contracts are placed after inviting individuals/companies to submit tenders in competition,

the number of individuals/companies invited to tender will vary with the nature of the contract and the availability of suitably qualified suppliers, in many cases it will not be practical to include all those suppliers who express an interest, and where there is a wide field of potential suppliers, public sector procurement may undertake a pre-qualification process.

Potential suppliers must demonstrate their financial, commercial and technical capability to fully meet the contractual requirements under tender, to take account of a company's past performance with reference to contracts of a similar nature, both with the public and other organizations, at clear demonstration of commitment to equal opportunities in employment, to the environment and to safe systems of working.

Public sector procurement may ask for references from previous customers, bankers, business information companies and in some cases, arrange inspection visits to the company.

Aspects be considered by a buying firm in selecting supplier.

The considerations that apply to purchasing products, and services, can be contrasted according to the nature of the product, the types of production and the principle uses to which a purchased item will be put. Supplier selection must be situational which related to the requirements of the particular purchaser, and evaluate potential suppliers’ in such different perspectives.

Finance.

Production capacity and facilities.

Human resources.

Quality.

Performance.

Environmentaland ethical considerations.

IT.

Organizational structure

Such information may be obtained from questionnaires sent to prospective suppliers that have applied to be added to the purchaser’s list of approved suppliers or prior to a supplier visit.

Choosing the right supplier involves much more than scanning a series of price lists and will depend on a wide range of factors such as value for money, quality, reliability and service. The importance of these different factors will be based on business' priorities and strategy.

Aspects that a purchaser takes into consideration include:

Competency of the supplier to undertake the tasks required
Capacity of the supplier to meet the purchaser’s total needs
Commitment of the supplier to the customer in terms of quality, cost driving and service
Control systems in relation to inventory, costs, budgets, people and information
Cash resources and financial stability ensuring that the selected supplier is financially sound and is able to
continue in business into foreseeable future 
Consistency the ability of the supplier to deliver consistently and, where possible, improve levels of quality and service.