Supplier Selection by recommendation! Will this fly?

[Andy Bassett]

Background

Small electronics company of 11 people assembling simple electronics components for customers.

Components are often supplied by the customers, if not the vast majority are bought from distributors.

After a hot discussion about Supplier Selection last week, i threw away the Standard and said OK. 'If you need a new supplier what do you do?'

The reply was; I source a supplier and ask colleagues and friends what they know about them.
What! No questionnaires, no audits, no demand to see ISo certs, hardly ISO compliant you may think.

But wait a moment. We are constantly being told when we are looking for accountants, lawyers doctors or consultants to seek references. Maybe this is a valid form of supplier selection.

So if this is true, what would stop me creating a simple table, where my client lists his suppliers and his source of recommendation? ie Supplier 'Jon Doe' recommended to me by Fred Smith 14.6.2000.
I realise that this is efficient, flexible and dangerously close to reality, but even so, will i get it past an ISO auditor.

What about the distributors? I am going to try and aviod listing them anywhere simply becuase it will add no value. It is a fact that electrical components are traded like commodities, even if they cant get them where they want, they will go somewhere else in the world, requesting ISO certs or questionnaires to be filled out is simply not value adding.
If this flies they will be down to listng and measuring just 5 of their suppliers that actually produce goods to their specs.

What do you think. Could it fly?

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Andy B

[Jim Biz]

This reads like it would fly in our auditors eyes anyway. Last external we explained that some of the suppliers we use are "Customer identified" He "indicated" that it would not be wrong to list them on our Master as such. I would however be real careful with how you do it .. the follow up question may be "show me the evidence of customer identification?"

[This message has been edited by Jim Biz (edited 21 June 2000).]

[Marc]

Originally posted by Andy Bassett:
What do you think. Could it fly?

Maybe as part of a larger whole. Recommendations are quite subjective - I would have questions about using that as a sole criteria.

[Andy Bassett]

Hello Marc - Come back to me on this one if you would.

I could think of many weird and wonderful supplier selection and measurement schemes. But when asked this particular company owner basically said that he would not dream of starting to work with suppliers based on how they answered a questionnaire, or if they had an ISO cert on the wall. He would seek personal recommendations.

After i digested this for a few minutes, and thought about how we ourselves select our accountants, solicitors doctors and dentists etc, (mainly by personal recommendation i beleive) i realised that he had a valid point.

If i stated on a Supplier List the source of the recommendation do you think this would be enough.

Regards



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Andy B

[Marc]

I would have no problem with 'recommendations' as part of a larger whole, as I said above. I would also include some other aspects. I would consider ISO 9001 registration as one aspect. ISO would indicate they have a working nonconformance - corrective action system and several other systems I would want to exist. Price would be another consideration. Delivery (first what they claim they can do and then what actually happens) is another.

After i digested this for a few minutes, and thought about how we ourselves select our accountants, solicitors doctors and dentists etc, (mainly by personal recommendation i believe) i realised that he had a valid point.

How many times have you been given a 'bum steer' in a recommendation? Want to hear a story about a car I bought a while ago from a person who was very highly recommended by a friend? Want to hear my story about a highly recommended contractor and the 20% cost over run job (20% higher than the bid)? I have nothing against recommendations, but they aren't everything by any means.

Also check out sup_eval.pdf in the pdf_files directory for a simple evaluation form.

[Tom Goetzinger]

How many times has it been said to write your procedures the way you do them? If it is effective and works for your company, I see no problem with it.
I do think it is important that you measure their performance and have a plan and method to improve performance or replace those vendors who do not meet your standards.
As far as getting a bum steer, I'm sure that many of us can relate stories of vendors who looked good on paper and didn't end up being as good as they looked. You certainly can't always visit every supplier on a regular basis, and even if you could, you can't ALWAYS tell.

[Andy Bassett]

OK. I could actually argue the subject whichever way suited me on the day, as i am actually a big beleiver on Supplier Management, im just simply not sure that it is relevant for this particular operation.

Tom you are right it is often said that procedures should be written in the best way that suits the company, and thats what i wanted to do in this case, i was just wandering if it would pass the ISO test.

Dont we have an auditor amongst us somewhere, is it Laura? What does she think?

Regards


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Andy B

[CarolX]

I would like to say thank you for a very timely subject. We have just started to tackle this subject, and I must agree that if this is the way supplier selection has been done, the document it as such. We are taking a similar approach. We select new suppliers based on referal's. Then we go deeper into price and delivery. The "proof" is - do they deliver an acceptable prototype when then say they will.