Supplier Capabilities Analysis

In this section, the objective is to compile the global supplier list including all their applicable capabilities. This process will provide a framework for mapping the key suppliers in the marketplace and establish the scheme for evaluating and selecting suppliers through the sourcing process. The outline of supplier strengths and weaknesses will be essential to understanding how the supply base will be able to perform against the objectives of the strategy.

In order to properly assess the supplier capabilities, the organisation should review some/all of the concepts below:

  • Identify the worldwide, regional and local capabilities of the supply base for this category.
  • Perform comparisons along the following dimensions: cost, delivery, and quality performance; continuous improvement; design capability; and investment in new technologies. Identify industry leaders
  • Indicate current aggregate delivery and quality performance
  • Indicate which suppliers have the ability to manage sub-tier suppliers and can be integrators
  • 3-year sales volume history; profitability
  • Relevant new product releases, products known to be under development
  • Financial analysis, credit rating
  • Plans for ISO registration
  • company‘s current relationship with the supplier, including certification plans
  • Manufacturing and distribution locations
  • Service facilities

When we assess the supplier(s) capabilities, it is important to review all aspects of the suppliers business and any information that may assist in determining the overall supplier evaluation criteria during the sourcing process. Here are a few questions we can ask when reviewing suppliers‘ capabilities. The responses to these questions should be added

  • How are the suppliers‘ geographically distributed?
  • Which suppliers are the market leaders and which are market followers?
  • Do suppliers compete on quality, service, price, or other factors?
  • Is there any obvious competitive advantage held by a supplier?
  • Which companies appear to lead in research and development and innovation?
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