Now more than ever, supplier selection must produce stellar results as companies increase their focus on supply chain management and push more requirements down the chain to their partners. Business continues, but with different strategies. For example, Siemens AG plans to reduce costs by centralizing 47% of its procurement spending by 2010, compared to its current level of 29%.

Clearly, companies are viewing changes in supplier management as a way to gain more value from their partners. Consequently, performance expectations are increasing, and companies are using their supplier partnerships as a means of driving innovation. Using the right supplier selection tools can play a critical role in building value-based relationships.

So, how can you ensure a successful selection process?

What is the Project Management Approach to Selecting the Best Suppliers — And How Will It Help Your Organization?

The Project Management Institute (PMI) model serves as an excellent framework for procurement activities. This structure can help procurement teams focus their attention on each key element in the selection process and identify the real treasures in their potential supplier base. The PMI model identifies five process groups teams can use to design and manage a value-based selection process. These are:

1. Initiating – Ensures the support of leaders in your organization so you can move forward.

2. Planning – Critical for identifying all of your business needs.

3. Executing – Provides a structured approach for evaluating bids to guarantee desired results.

4. Monitoring and Controlling – Forces you to evaluate and incorporate any new information.

5. Closing – Formalizes results and establishes a plan for implementation.

Initiating – The First Critical Step in Selecting an Innovative Supplier Partner

In the Initiating phase, the sourcing of a product or service is approved and key players are identified, including stakeholders and the project team. This is critical in large organizations where a product or service such as a communications process, for instance, touches a multitude of business units and functional groups.

For example, the General Motors (GM) dealer communications process involves approximately 10 constituent groups within GM alone. When the dealer relations team needed to identify a new supplier, they canvassed the corporation. They identified each department that used the process, even those that only sent materials to dealers occasionally. This group of stakeholders was involved up front, and the team was able to avoid issues later in the procurement activity.

Planning – A Phase That Must NOT Be Shortchanged Just So You Can Find a Supplier Quickly

The team uses the Planning phase to flesh out business and performance requirements in detail. Each stakeholder group feeds its unique set of expectations to the team, who then incorporates them into the requirements. The team identifies the risks, scope, cost targets, and timing of the procurement effort.

This phase has some unique aspects for a procurement project, the most important of which is identifying qualified potential suppliers. The team should think creatively about how the new supplier must create value and provide benefits that were missing in the past. With proper planning, an organization can move from having suppliers who just sit on the sidelines to having real value partners who support the strategic vision. For instance, suppose a sales organization wishes to upgrade its online store and improve order-processing time. They must identify a fulfillment supplier with strong IT capabilities and state-of-the-art warehousing.

A note of caution on the Planning phase is in order. Procurement teams must resist the temptation to shortchange this step in the name of finding a supplier quickly. The task of identifying requirements can take months, as was the case with GM’s dealer communications process. Identifying requirements up front will uncover possible conflicts and inadequacies. For example, if a benefits solutions group wants to implement a web-based application process, they need to know whether their existing technology infrastructure will accommodate such a change. Knowing these things will help the team come up with a realistic task list and timeline for implementation.

Executing – The Third Critical Step in Selecting an Innovative Supplier Partner

In the Executing phase, the team brings to bear the fruit of the Planning phase by creating and distributing a Request for Proposal (RFP) that reflects the business requirements. The team uses the requirements to develop evaluation and ranking tools, and then uses these tools to assess each response to the RFP.

The team identifies a subset of suppliers as candidates for negotiations, and conducts a series of detailed discussions that include clarification of the RFP response, scope issues, schedule, and other areas of concern. This step includes multiple rounds of pricing discussions that will lay the groundwork for a final selection.

Monitoring and Controlling – The Fourth Critical Step in Selecting an Innovative Supplier Partner

In the procurement context, Monitoring and Controlling involves a review of the scope, requirements, schedule, and other metrics involved in the evaluation. This review creates an opportunity to refine assumptions and get feedback from the respondents on their ability to meet or exceed the stated performance goals. Teams can use the feedback to calibrate the performance goals and to make tradeoffs of scope versus schedule, for example. Then they can create a more realistic set of performance goals, if appropriate. The team documents changes to performance metrics, scope, and schedule, and presents these for approval as well.

Closing – The Last Critical Step in Selecting an Innovative Supplier Partner

Closing is the last phase of the project. Here the team recommends a supplier to the appropriate groups, and the purchasing managers develop the contract documents. The procurement team develops guidelines on details to watch for while managing the new contract. For example, if the team awards a contract to a web developer on the condition that the developer commits additional resources for implementation, the commitment needs to be captured in the guidelines to ensure it is not overlooked. This document also serves as a reference for future procurement activities, including any follow up work with the selected supplier.

This five-step method is an indispensable tool for addressing current and future requirements, particularly for multifaceted contracts involving diverse stakeholder groups within your organization. Using it will ensure your ability to select a partner with the vision and capabilities needed to create a sustainable, scalable solution that advances your strategic goals.



By: Monica Johns

About the Author:

Having found that the top growth performing CEOs were continually improving their business models to become more profitable, the next challenge was to see what else could be learned about business model innovation. When I began to look at the earlier history of business model innovation, I saw that improved business models usually came from start-ups and new entrants. So entrepreneurs were obviously focused on this opportunity.

I then became curious about the frequency with which companies enjoyed ongoing success in improving their business models. Where should I find the answer?

I read the profiles of all public companies described in the Value Line Investment Survey over 12 years. I noted the companies that seemed to have completed at least two major successful business model innovations during those years, without regard to their stock-market performance. As a result of either lower stock-price growth or changes in CEOs, many of them did not make my CEO 100 lists during those years.

I contacted these companies by e-mail to request interviews with their CEO and some of the other senior executives. From these contacts, I was able to arrange CEO interviews at over 40 companies.

I performed literature searches on another few dozen companies that confirmed that they had been frequent business model innovators, but these companies declined to be interviewed. Obviously, you can still learn lessons by characterizing the direction that those companies take even if you cannot learn more fine-tuned details.

From these investigations, I became convinced that at least 70 public companies had performed at least two major successful business model innovations in the same business over the 12 years.

I began a year-long analysis. I took what was learned and summarized it in simple form so that more companies could understand how to choose and successfully follow this path. You could obviously do the same thing for the examples that interest you.

To test my thinking, I discussed the work in progress with many of the CEOs and their staffs as well as top strategic thinkers in other companies. Many valuable corrections and improvements were made as a result.

Next, I sought out individual, small company, and nonprofit examples of the themes that the larger, public companies exhibited. Many of these examples are drawn from my personal experiences with the subjects or my long-term interest in their work.

Finally, I kept in touch with all of the individuals and companies so that the information could be as up-to-date as possible.



By: Donald Mitchell

About the Author:

Ability of any firm to realize the value of new, and assimilate it to its existing propositions to meet commercial ends reflects to its customers its innovative capabilities. Innovations and inventions in economic, social, political or in any field of activity, which promise to increase the productivity and contribute towards the development have always been appreciated and encouraged by the government of America.

This is the world of change and only with the change can there be a possibility of further growth and prosperity. Whether any firm, individual, or any group or any section of society has any idea or proposal for any new invention or innovation in their existing work process is always regarded in high esteem and is entitled to apply for grant from the government.

Different departments of government have special provisions to provide grants for those who are willing to show their innovative, scientific and creative spree that would create an everlasting impact on the generations to come and would emerge as the most useful product for the whole humanity for e.g. U.S. Department of Energy I&I supports with grants to all small businessmen who promise to adopt in their work area energy saving concepts and technologies. Those technological devices, inventories and machines using very limited energy are entitled for the Grant of I&I.

Aspiring businesses have to be always alert on funding schemes being announced by I&I twice a year. This announcement is awakening call for the businessmen to immediately avail of this opportunity by registering themselves with the Interactive Procurement System (IIPS) and then later submit their prepared proposal.

Only those proposals which respond themselves to the open announcement will be accepted by I&I. Hereby only those proposals which meet criteria of the government announced scheme and appear to be more productive and conducive than the others would be granted this privilege.

In the same way, the National Institute of Standards and Technology also fund the program called Advanced Technology Program ATP to motivate businessmen for investing the money, time and their energy for the high-risk technology development, which in turn can be utilized for increasing productivity and product development.

There is also Small Business Technology Transfer Program (STTR) regulated and administered by the Office of Technology at SBA with an intention to give boost to the start up firms or companies for bringing in technological innovations in their produced products and services. Non-profit research institutions can also be a part of the grant program by becoming an aspiring applicant for the same.

Grants not just solve the funding problem but also become a source of inspiration for the people to give their ideas and valuable propositions a good sense of deliverance, a good taste and are further able to appease the appetite of the masses.  

 



By: John Goldman

About the Author:

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When you spend a huge amount of your hard earned money on something, you need a lot of time thinking on it. There are also many inexpensive designs available. This depends on the design you choose, the time it takes to complete and how large it is. Try to make your tattoo design a piece of value. It needs to be something you love and would hold a lot of value throughout your life.

If you are all confused by now, Tattoo me Now is going to be a great help for you. It is an online bible for all those who want to get the best of tattoo designs on their body. Tattoo me Now is easy to reach and helps you to get your dream tattoo in no time. This website works towards offering more than about three thousand five hundred designs. All these designs are unique, elegant, cool and trendy. You would enjoy a lot browsing this website for a tattoo design for yourself. You can find designs for varied themes, designs and images.

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By: Steve Manik

About the Author: