By: Michael Misner, Tina Romero, Kristell Millan, Kelley Smith

Problem: Supplier selection process is subjective Goal: Develop multi-dimensional supplier evaluation model to rate technically capable suppliers on standard selection criteria in order to create an optimal allocation strategy
TCO Financial Health Quality BCP Risk

Define problem statement Research supply chain metrics Prioritize metrics for sub-scorecards Create sub-scorecards Create multi-supplier evaluation matrix (MSEM) Test MSEM using Test Interface Unit (TIU) suppliers Develop Allocation/Apply Methodology Recommend optimal TIU allocation strategy

Final Defense

Checkpoint #2 Checkpoint #1

30%
320 300 280 260 240 220

Total Cost of Ownership

($ in Millions)

30%

Altman Z-Score, Quick Ratio, ROA, Debt Ratio, GPM

100% 80% 60%
57% 44% 100%

Financial Health Data

86%

40%
20% 0% Supplier M Supplier A Supplier S Supplier R

Supplier M

Supplier A

Supplier S

Supplier R

25%
100% 80% 60% 40% 20% 0%

Quality: 3-Prong Analysis

Product Quality 60%, Service Quality 25%, Social Impact Quality 15% 89% 72% 71%

15%
70 60 50 40

BCP: Cost of Risk Mitigation ($ in Millions)

58.4

39%

30 20 10 0

30.2

24.2

27.3

Supplier M Supplier A Supplier S Supplier R

Supplier M

Supplier A

Supplier S

Supplier R

Multi-Supplier Evaluation Matrix [MSEM] TIU Test Case Results Weights Supplier M Supplier A Supplier S Supplier R

Financial Health
TCO Quality BCP Final Score

30%
30% 25% 15% 100%

100%
83% 80% 40% 81%

86%
86% 100% 100% 91%

44%
97% 79% 70% 72%

57%
100% 44% 0% 58%

Highest score is Supplier A Sole Source Strategy MSEM identifies enough suppliers for a Multi-Sourcing Strategy

Allocation
Single

Total

TCO

Financial Health

Quality

BCP

100% Supplier A
Multi 33% Each Dual 50%-50% (M-A)

92%
82% 86% 88%

$269M
$263M $273M $271M

86%
77% 93% 90%

89%
77% 81% 84%

$24M
$27M $27M $26M

Multi

Dual 30%-70% (M-A)

Multi 65%-20%-15% (A-M-S)

91%

$267M

83%

83%

$26M

Recommendation:
TIU Test Case: Multi-Supplier Strategy
[65% A, 20% M, 15% S]

MSEM model should be used for all commodities