Suppliers and Supply Chains PDF

Suppliers & supply chains Dr C. Hattingh  1.1 Introduction Supply chain: “a network of manufacturers and service providers that work together to create products or services needed by end users” -linked together through (1) physical flows, (2) information flows, (3) monetary f...

Suppliers & supply chains Dr C. Hattingh  1.1 Introduction Supply chain: “a network of manufacturers and service providers that work together to create products or services needed by end users” -linked together through (1) physical flows, (2) information flows, (3) monetary flows  1.1 Introduction (1) Physical flow: logistical movement of goods/services from one place to another. For example: a portaloo company will need to transport these facilities to a music festival ready for audience use. (2) Information flow: passing on and dissemination of event messages to suppliers and the event company/other stakeholders. For example: communication via email, telephone, physical meetings is needed to transfer key narratives from one supplier to the next. Include quotations, purchase orders, invoices etc.  1.1 Introduction (3) Monetary flows: pathways the finances take when ordering, paying for and securing supplies. For example: a 50 % deposit to secure a photographer for the event.  1.1 Introduction Events are made up of multiple layers of supply chains. Events operate by utilising connections and professionalism of other firms and resources to ensure the event’s success. For example: -A wedding marquee needs to be constructed (framework) and external covers need to be fitted. -Once marquee is weatherproof, electrician could start installing lighting. -Hiring furniture relies on the furniture hire company. Figure1: Event supply chain  1.2 Supply chain management A project is only as good as the weakest part of the process. An events coordinator may allocate substantial time/resources to make sure that all processes involved in planning the event run smoothly, but the project outcome will be dependent on the collaboration and performance of the supply chain. Considerable amounts of project work can be outsourced and performed by specialist suppliers or contractors. Outsourcing: the means by which a company acquires the processes it lacks or is unwilling to perform. 1.3 Roles & relationships: contractors/suppliers in the events industry For an event to take place, the event organiser engages the services of various contractors and suppliers. Contractors/suppliers: a person or company who fulfils a role or provides a service relating to the management or planning of the event for the event organiser. Some contractor/suppliers are more significant to the success of an event than others -primary vs. secondary contractors/suppliers  Primary (critical) contractors/suppliers – fundamental to the implementation and delivery of a safe and successful event. Secondary contractors/suppliers – those which influence the quality levels of the event. Figure 2 (venn diagram): next slide Typical primary/secondary event contractors/suppliers  Sponsorship Staging Ticketing Advertising/Marketing Signage PRIMARY SECONDARY Health & Safety Entertainment Traffic Management Décor/furniture Event Management Team Bar and catering Risk assessment Litter collection Venue Merchandising Licensing/permits Lighting & sound Security Fencing/barriers Water Public transport Waste management Toilets Medical Insurance  Critical/primary contractor examples (event dependent): health & safety staff or a health/safety company, the medical provider or contractors for legal compliance. Secondary contractor example (event dependent): lighting & sound provider, catering. The middle section of the Venn diagram demonstrates that some contractors/suppliers may shift between the role of primary/secondary contractor/supplier. This depends on a number of factors (each event is different and is treated individually). It may be necessary to contract primary contractors/suppliers several months in advance to ensure that contractors/supplier is aware of what is expected of them.  Activity 1) Make a list of the different contractors/suppliers that are likely to be part of a beach wedding (they might be different to the venn diagram as the diagram is not an exhaustive list). 2) Put them into list form as primary (critical) contractors and secondary contractors. 3) Give reasons why they fall into the particular category for your specific event. 1.3.1 The 10’cs of supplier evaluation You may have found a supplier that offered a good price, but later realised that its quality standards were low, or that its communication was unacceptably poor. Mismatches between your needs and a supplier's offerings can add costs, cause delays, affect the event’s overall quality and even damage your reputation – for example, if the equipment or resources supplied are substandard. The "10 Cs of Supplier Evaluation" will help you avoid problems like these.  Used as a checklist, the 10 Cs model can help you evaluate potential suppliers in several ways. First, you can use it to analyse different aspects of a supplier's business: examining all 10 elements of the checklist will give you a broad understanding of the supplier's effectiveness and ability to deliver. The 10 Cs are: 1. Competency. 2. Capacity. 3. Commitment. 4. Control. 5. Cash. 6. Cost. 7. Consistency. 8. Culture. 9. Clean. 10.Communication. 1. Competency First, look at how competent this supplier is. Make a thorough assessment of the supplier's capabilities measured against your needs, but then also look at what other customers think. How happy are they with the supplier? Have they encountered any problems? And why have former customers changed supplier? 2. Capacity The supplier needs to have enough capacity to handle your event's requirements. Does it have the resources to meet your needs, particularly when commitments to other clients are considered? (These resources include staff, equipment etc.) 3. Commitment Your supplier needs to provide evidence that it's committed to high quality standards. Where appropriate, look for quality initiatives within the organisation, such as ISO 9001. 4. Control Query how much control this supplier has over its policies, processes, procedures, and supply chain. How will it ensure that it delivers consistently and reliably? 5. Cash Does this supplier have plenty of cash at hand, or is it overextended financially? What information can the supplier offer to demonstrate its ongoing financial strength? 6. Cost Look at the cost of the product that this supplier provides. How does this compare with the other firms that you're considering? Most people consider cost to be a key factor when choosing a supplier. However, cost is in the middle of the 10 Cs list for a reason: other factors, such as a commitment to quality and financial health, can potentially affect your event’s outcome much more than cost alone, particularly if it is a primary/critical supplier. 7. Consistency How will this supplier ensure that it consistently provides high quality goods or services? The supplier should have processes or procedures in place to ensure consistency. 8. Culture The best business relationships are based on closely matching workplace values (business culture). For example: what if your most important value is quality, but the supplier cares more about meeting deadlines? Mismatch could mean that it’s willing to cut corners. 9. Clean The supplier's adherence to environmental laws and best practices. Ask to see evidence of any green accolades or credentials that it's earned. Also, does this supplier treat its people – and the people around it – well; and does it have a reputation for doing business ethically? 10. Communication Query how the supplier plans to keep in touch with you. Will its proposed communication approaches align with your preferred methods? And who will be your contact person at this firm? It's also important to find out how the supplier will handle communications in the event of a crisis. How quickly will it notify you if there's a supply disruption? How will that communication take place? And will you be able to reach senior people, if you need to? Tip: If you have only a few suppliers to choose from, you might quickly eliminate all of them, if you want them to excel in all 10 Cs. To avoid this, use a tool such as the Decision Matrix Analysis to choose the supplier who best satisfied the conditions that are important to you.  Decision Matrix Analysis Making a Decision by Weighing Up Different Factors You could decide to go with the low-cost option. But you don't want to make your decision on cost alone – factors such as contract length, underlying technology, and service levels need to be taken into consideration. So how can you make sure you make the best decision, while taking all of these different factors into account? Decision Matrix Analysis is a useful technique to use for making a decision. It's particularly powerful where you have a number of good alternatives to choose from, and many different factors to take into account. This makes it a great technique to use in almost any important decision where there isn't a clear and obvious preferred option. Being able to use Decision Matrix Analysis means that you can take decisions confidently and rationally. Step 1 List all of your supplier options as the row labels on the table, and list the factors that you need to consider as the column headings. Step 2 Next, work your way down the columns of your table, scoring each supplier for each of the factors in your decision. Score each supplier from 0 (poor) to 5 (very good). Step 3 The next step is to work out the relative importance (weights) of the factors in your decision. Show these as numbers from, 0 to 5, where 0 means that the factor is absolutely unimportant in the final decision, and 5 means that it is very important. Step 4 Now multiply each of your scores from step 2 by the values for relative importance (weight) of the factor that you calculated in step 3. This will give you weighted scores for each supplier/factor combination. Step 5 Finally, add up these weighted scores for each of your options. The option that scores the highest wins! Example: You need to select a caterer for your event. There are 4 caterers (options) for you to choose from. Factors that you want to consider are: 1. Cost. 2. Quality. 3. Location. 4. Reliability. 5. Payment options. Figure 3: Example Decision Matrix Analysis Showing Unweighted Assessment of How Each Supplier (caterer in this case) Satisfies Each Factor Figure 4: Example Decision Matrix Analysis Showing Weighted Assessment of How Each Supplier Satisfies Each Factor Which supplier will be the best option and why?  Activity You are the organiser of a private function and need to select a graphic designer for your seating plan, table numbers, invites, menu etc. You have shortlisted four suppliers (options) but you are unsure as to which one will be the best for the event. To avoid making the wrong decision, a tool such as the Decision Matrix Analysis may be used to choose the supplier who best satisfy the conditions (factors) that are important to you. By drawing a Decision Matrix Analysis, choose five of the 10 c’s of supplier evaluation to analyse different aspects of the four shortlisted suppliers (options) available to you. Which supplier will be the best option and why?