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Criteria for vendor selection


Criteria for vendor selection

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									Criteria for vendor selection:

In the purchasing process, as a purchaser, one has many responsibilities and tasks, but the
most important aspect of purchasing is SELECTING THE CORRECT VENDOR
There are a few basic guidelines, whether you’re buying books, nuts & bolts, underwear or
sweets, the purchasing principles remain the same.
The information I’m sharing with you today is purely from a purchasing management

Now, more the ever, the right thing, at the right time at the right price determines the success
of the purchasing department.
As companies are forced to improve their own products and services, vendors are pressured
to upgrade their performance on quality, service and price.
The selection process does not always follow the same path and is not always applied in
the same way, because circumstances differ and product and services required differ.
Purchasing policies of the organization also influence the process of selecting a specific
These policy guidelines enable the purchasing department to make decisions more easily
and also give direction to their actions.
Selecting competent vendors in the first place, results in an almost problem-free buying

Before looking at the criteria for vendor selection, lets first look at the characteristics of a
good vendor:
 A good vendor honours promises, has a stable background, always supplies at the
   specified quality at fair and competitive prices
   In other words, gives me what I need at the right price.
 A good vendor reacts quickly to unforeseen needs of the purchasing firm
   From a library’s side it may happen that the item is suddenly needed urgently, more
   quantities are needed, the course has changed and another title has been recommended
 A good vendor takes the initiative in suggesting better methods or services in order to
   develop money-saving products or services
   Like a new edition of the books is available or similar titles are available if the book
   requested is “OUT of PRINT”
 A good vendor warns the purchasing firm in good time if, for whatever reason, the
   normal delivery time or conditions cannot be met
 A good vendor will take the initiative when it comes to technological development and
   will offer the purchasing firm technical support or any other expertise
   Examples, which will be familiar to you, would be purchasing on-line or placing the orders

Looking at this, you will agree, the ideal vendor is hard to find in practice, but purchasers
should make every effort to trace the best vendor.
Criteria for vendor selection are quality, price, terms, delivery and service.
Additional criteria, which can be helpful in the decision-making process, are for example
performance on previous orders and comparisons of price and delivery.

The right vendor provides the right product, the right quality, on time, at the right price
with the right level of service.
To get the best sources of supply it’s important to evaluate vendors on an ongoing basis.
Unfortunately, the choice is not always simple.
Sometimes, it’s important to concentrate orders of a particular type or subject field with a
specific vendor.
Vendors, often prove themselves to be experts in a particular area or service.
Different factors need to be considered when making the selection decision.
Companies, who have the vision of becoming the best, also need good supply partners to
achieve their goals.
The purchasing department plays an important role in any organisation.
The buying process is complex because of the variety of factors, some of which are easy
and fairly simple to control and some which are not.

In the purchasing management scene, the buying process has a number of steps before
the actual order is placed.
Library purchasers must understand that the buying process has two legs, the responsibility
of the purchaser, knowing what he or she wants and giving the correct information to the
vendor and the responsibility of the vendor to comply with the specifications of the order.
Looking at the steps:
 Identify the need
 Description of the need
 Selection of vendors
             In deciding which vendor to use, the selection process involves the following
          The Survey phase – involves the identification of suitable suppliers
                 Purchasing managers may also take the following into consideration:
                  Lead time of the vendor, it is from initiation to completion of the order
                  Competitiveness of price
                  Vendor’s flexibility
          The Investigation phase – involves the analysis and comparison of the identified
          The Selection phase – involves the negotiation and the selection of the most
             suitable vendors
          The Relationship phase – consists of maintaining good relations with vendors
 Determining of prices & availability
 Budget availability
 Search for alternatives (if there are)
 Selecting the vendor
 Negotiate price and delivery date
     The selected vendor needs to understand conditions concerning delivery, packaging and
     payment issues.
 Placing the actual order

All the stages needn’t be followed when placing orders, exceptions can be made in the case
of routine buying, or where the company policy indicates the vendor to be used.
The discretion and experience of the buyer will determine this.
Selecting the right vendor is essential for the success of the purchasing function.
The purchaser must ensure that his or her business becomes important to the vendor.

Now ask yourself: are you receiving the right item, at the right time, at the right price?
If your answer is yes, build up long-term relations with those vendors, if you answer no, its
time your purchasing department re-evaluate it’s vendors.

“What can be done to ensure supplier’s quality performance after they have been added to
the firm’s supplier base?”

A good topic for the next acquisitions conference?

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