Logistics function management of suppliers - Logistics...

Logistics function management of suppliers

This logistic function is considered as part of supply chain management and involves not only the selection and monitoring of suppliers, but also the creation of partnerships, the harmonization of goals, incentives for cooperation and joint improvement. Consider an example of successful supplier relationship management, which is achieved by well-known manufacturing companies.

Foreign Experience

The companies Toyota and Honda managed to establish close relationships with their suppliers by observing the six principles. The first principle is to understand how their suppliers work. To do this, they say in Toyota and Honda, need to be interested in the activities and culture of suppliers, learn about them new, visit enterprises of suppliers, to respect their opportunities and aspirations for cooperation. The second principle - is to encourage competition between suppliers. Companies for each component or material have a relationship not with one but with two or three suppliers. At the same time, Toyota and Honda do not squash suppliers with each other, but stimulate competition between them, to the maintenance. In addition, companies support existing suppliers in this struggle, are eager to create joint projects, enterprises.

The third principle is the control of the supplier. Both companies are convinced that the role of suppliers is so important that you can not start a relationship with them on their own. They constantly assess the performance of their partners, establish goals for each supplier and monitor the performance of their activities and services. For example, Honda sends reports on analyzing the performance of suppliers on a monthly basis. The reports include assessing the quality, supply, volume, dynamics of indicators, and also separately analyze the incidents. For example, the report may contain such comments: "Work well, continue in the same spirit", "Please continue to work in this direction, we appreciate your efforts" or Marking errors are registered. Wrong countermeasures were insufficient. " In case of deviation of the indicators, the companies immediately react, contact the suppliers, are interested in the methods of solving the problems that the supplier is going to undertake. At the same time, they express the hope that the problem will be solved with the participation of senior management.

The fourth principle is the principle of development of joint technical potential. In fact, this is a value principle. In accordance with this principle, companies value the value of supplier innovation and encourage innovative solutions in every possible way. To do this, help the technical development of suppliers, investing in the development of the supplier's competence to design constructive solutions, organize training programs for engineers.

The fifth principle is the principle of intensive, but selective exchange of information with suppliers. To implement this principle, meetings are held but a clear plan in strictly defined terms, forms for the exchange of information are determined. Excessive information is found in Toyota and Honda, may be harmful, as it reduces concentration on the most important.

The Sixth Principle concerns the joint improvement of activities. The companies Toyota and Honda are developing training programs for suppliers, programs for continuous improvement. Such programs allowed Honda suppliers to increase productivity by 50%, quality - by 30%, to reduce costs by 7%. 50% of cost savings, suppliers must share with Honda1.

Selecting a provider is one of the most important logistics tasks in the supply industry, regardless of whether it is in a particular enterprise for purchasing management or for managing suppliers.


The vendor selection is based on criteria. In practice, basic and additional criteria for selecting suppliers have been developed. The main criteria, as a rule, include:

• the purchase price, which includes the cost of the goods and the cost of obtaining it, including shipping, customs clearance, insurance, etc .;

• the quality of the delivered products;

• reliability of deliveries, including compliance with delivery dates, completeness, quantity and other delivery characteristics.

The list of additional criteria differs in different enterprises, depending on the requirements for servicing, the type of products, financial capabilities and other factors. This can be the remoteness of the supplier and the timing of the fulfillment of orders, the availability of reserve capacity for the organization of emergency supplies, the availability of a quality management system or product quality certificates, the stability of the financial and market position of the supplier, and several others. Let's give some examples.

Practice questions

Manufacturing enterprise "Shipbuilding", which is engaged in the production of boats, has developed a list of criteria for selecting a supplier: the delivery time, the quality of materials or products, the price, the size of the advance, the observance of delivery terms, the possibility of granting a discount, the availability of a quality management system.

Enterprise Trade Equipment but the production of trade, filling equipment and conveyors for bottling uses the following list of criteria for selecting a supplier: cost, reliability, financial terms of the contract, delivery time, delivery deadlines, quality of service, minimum shipment rate, availability for delivery, supplier location, .

The production enterprise "Kombinat", specializing in the production of food products and having five production sites in the territory of St. Petersburg, in addition to the main selection criteria applies additional criteria:

• the supplier's ability to ship products to all five production sites:

• stability (fixity) of the price for a period of not less than six months;

• inclusion of the cost of delivery in the fixed cost of the delivered goods;

• Presence of an insurance stock equal to the insurance stock calculated by the system of inventory management at work. The safety stock must be reserved at any time during the contract;

• the possibility of emergency delivery within 24 hours after the order is received.

The criteria have different dimensions, and the question may arise: how to compare the work of applicants by different criteria? Thomas Saati, the author of the method of analyzing hierarchies, said: "The ancient saying that it is impossible to compare apples and oranges, is incorrect." Let's consider also a way of comparison which result should become the decision on a choice of the supplier.

The vendor selection can be performed on the basis of the general algorithm for choosing the logistics intermediary, shown in Fig. 5.5.

By combining some blocks of the algorithm, we describe the sequence of actions for selecting a supplier, highlighting the following main steps.

The first stage can be considered preparatory. It selects the criteria and divides them into three groups, depending on the indicator by which the selection criterion can be measured: a group of quantitative, qualitative, relay criteria. Relay criteria include those that can only take two values: yes or no & quot ;. Some quantitative and qualitative criteria can also be considered as relay ones, if their value should be no less or not more than a certain threshold level. The selection of relay indicators increases the objectivity of the selection process.

The nerve stage also selects a list of potential suppliers and estimates the values ​​of each criterion for them. Applicants who do not pass selection according to the relay criteria do not participate in the further selection procedure.

The second stage is used to rank the criteria for the subsequent choice of the dependency, which will then be used to calculate the weight

Algorithm for choosing logistics intermediaries (LP)

Fig. 5.5. Algorithm for selecting logistics intermediaries (LP)

criteria coefficients. There are different methods of ranking, we propose to use the method of paired comparisons, in which the matrix is ​​filled 1k -. The elements of this matrix can be determined by the formula

Equality signs, less and more correspond to the equivalence of criteria, the smaller and greater importance of one criterion in comparison with the other, respectively.

At the third stage , based on the results of the ranking, a dependence is selected to calculate the weight coefficients ω,., taking into account the degree of influence of the indicators on the integral estimate. If the dependence is close to a linear form, then the weights are calculated by the formula

Hz N - number of criteria considered.

For non-linear dependencies, weighting coefficients can be determined by other formulas, for example:

where N is the interval calculated taking into account the number of indicators and the span of the values ​​ x] x1 - the middle of the 1st interval, i = 1,2, < strong> N

The fourth stage - is the processing of quantitative criteria values. Since quantitative criteria have different dimensions, their values ​​need to be reduced to a dimensionless form, and as a way to normalize the values ​​of quantitative criteria, it is suggested to use the qualimetric approach. In accordance with the methods of qualimetry for each criterion, a reference value is determined - this is the maximum or minimum value, depending on the influence of the indicator on the overall assessment. If the largest value of Ammax is selected as the reference value, all the values ​​of the criterion relating to the different suppliers are divided into a standard and the values ​​of the criterion are transformed into a ~ = А ^/А1шх. If as the reference value, the smallest АШп, is selected, then the standard is divided by the values ​​of this criterion from other suppliers and the criterion value А-1} are converted to a1} = AIN/A ^ The converted (normalized) values ​​of the criteria are dimensionless, and their values ​​are less than or equal to 1 and greater or equal to 0.

The fifth stage is dedicated to processing the values ​​of qualitative criteria. For this purpose it is proposed to use the Harrington desirability function (Table 5.4): depending on the quality assessment, a quantitative analogue of the value of the qualitative criterion is selected. Dimensionless analogues, like quantitative indicators, have values ​​less than 1 and greater than 0.

Table 5.4. Quality assessment and associated standard ratings on the desirability scale

Quality assessment and corresponding standard ratings on the desirability scale

The sixth stage calculates the integral estimates and determines the vendor rating. Integral evaluation is the sum of quantitative and qualitative estimates of the supplier's performance, taking into account the weight of the criterion. A supplier with a large integral rating is assigned a rating of 1, a supplier with a second-largest integral rating receives a rating of 2, etc.

If a long-term contract is concluded with the supplier, great importance is given to control over its operation. Intuitive, statistical and other methods can be used to carry out this control. In particular, the statistical method provides for the construction of control charts.

Examples of control charts are shown in Fig. 5.6 and 5.7.

Control card for a managed state>

Fig. 5.6. Control card for a managed state

Control card for an unmanaged state

Fig. 5.7. Control card for an unmanaged state

As can be seen from Fig. 5.6 and 5.7, the control card consists of a central line, upper and lower control limits. On the control card values ​​of an indicator of an estimation of work of the supplier are put. If all these values ​​are between the control limits, without forming trends, then the process is considered as being in the control (controllable) state. If the values ​​on the basis of which the supplier's work is evaluated fall outside the control limits and this state is not considered a statistical error, then the process is considered to be out of control, or uncontrollable. In this case, the question of replacing the supplier may be raised.

The task of selecting a supplier is related to the problem of reducing the functional cycle and reducing transaction costs due to the time spent searching for and identifying alternatives, negotiating, registering contracts, etc.

To reduce the amount of transaction costs, enterprises resort to repeated purchases with the same parameters, as well as with minimal parameter changes (modified purchases). Differences between the types of purchases, due to transaction specificity, are given in Table. 5.5. This table allows you to conclude that if the selected supplier fulfills its obligations, in order to reduce transaction costs and lead time, you should opt for repeated purchases.

Table 5.5. The need for negotiation based on the transactional nature of the procurement

Purchasing phase

Purchasing class

Purchase for new tasks

Re-purchase with changes

Re-purchase unchanged

Awareness of need




Needs description




Definition of consumer properties of material resources




Finding suppliers








Provider Selection








Evaluating supplier performance




Practice questions

At the East Vostok production plant in St. Petersburg, it was determined how long it would take for the supplier to supply the necessary spare parts. At the same time, the supply department specialists compared the capabilities of a supplier acting under a long-term contract, a new supplier and a potentially approved supplier, with which the company still does not have a contract (Table 5.6).

Table 5.6. Delivery times for spare parts from different suppliers

Case scenario

Average delivery time to the warehouse, days

New Provider

Supplier approved

the vendor has a valid contract

Spare parts are in stock in St. Petersburg




Spare parts are in the warehouse of the supplier in Moscow




Spare parts are in the United States




Spare parts can be produced in the United States




Spare parts are in stock in Europe




Spare parts can be produced in Europe




From Table. 5.6 it is evident that the supplier acting under the long-term contract, in all situations, the delivery time is shorter than that of other suppliers. The difference in the timing between different suppliers can be used to estimate transaction costs.

To reduce transaction costs, many enterprises use an electronic form of supply, which has several advantages:

• gives instant access to suppliers located anywhere in the world;

• create a transparent market where products are easily accessible, and the conditions for obtaining them are acceptable;

• Automates purchases using standard procedures;

• Significantly reduces the time required for transactions;

• reduces costs (12-15%);

• uses outsourcing for some procurement activities;

• Integrates its own information system with similar provider systems.

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