Senior High School

Entrepreneurship
Module 9:
Potential Suppliers and Value/Supply
Chain in Relation to Business
Enterprise

AIRs - LM
LU_ Entrepreneurship_Module 9
ENTREPRENEURSHIP
Module 9: Potential Suppliers and Value/Supply Chain in Relation to Business Enterprise
Second Edition, 2021

Copyright © 2021
La Union Schools Division
Region I

All rights reserved. No part of this module may be reproduced in any form without written
permission from the copyright owners.

Development Team of the Module

Author: Marites C. Martinez

Editor: SDO La Union, Learning Resource Quality Assurance Team
Content Reviewer: Kay Owen L. Boado
Language Reviewer: Jimena Veronica T. Nieva
Illustrator: Ernesto F. Ramos, Jr.
Design and Layout: Angela Pauline C. Ganuelas & Hasmin R. Omaoeng

Management Team:

Atty. Donato D. Balderas, Jr.

Schools Division Superintendent
Vivian Luz S. Pagatpatan, Ph.D
Assistant Schools Division Superintendent
German E. Flora, Ph.D, CID Chief
Virgilio C. Boado, Ph.D, EPS in Charge of LRMS
Lorna O. Gaspar, EPS in Charge of Entrepreneurship
Michael Jason D. Morales, PDO II
Claire P. Toluyen, Librarian II

Printed in the Philippines by: _________________________

Department of Education – SDO La Union

Office Address: Flores St. Catbangen, San Fernando City, La Union
Telefax: 072 – 205 – 0046
Email Address: launion@deped.gov.ph

LU_ Entrepreneurship_Module 9
 Senior High School

Entrepreneurship
Module 9:
Potential Suppliers and Value/
Supply Chain in Relation to
Business Enterprise

LU_ Entrepreneurship_Module 9
Introductory Message
This Self-Learning Module (SLM) is prepared so that you, our dear
learners, can continue your studies and learn while at home. Activities,
questions, directions, exercises, and discussions are carefully stated for you
to understand each lesson.

Each SLM is composed of different parts. Each part shall guide you
step-by-step as you discover and understand the lesson prepared for you.

Pre-tests are provided to measure your prior knowledge on lessons in

each SLM. This will tell you if you need to proceed on completing this module
or if you need to ask your facilitator or your teacher’s assistance for better
understanding of the lesson. At the end of each module, you need to answer
the post-test to self-check your learning. Answer keys are provided for each
activity and test. We trust that you will be honest in using these.

In addition to the material in the main text, Notes to the Teacher are
also provided to our facilitators and parents for strategies and reminders on
how they can best help you on your home-based learning.

Please use this module with care. Do not put unnecessary marks on
any part of this SLM. Use a separate sheet of paper in answering the exercises
and tests. And read the instructions carefully before performing each task.

If you have any questions in using this SLM or any difficulty in

answering the tasks in this module, do not hesitate to consult your teacher
or facilitator.

Thank you.

LU_ Entrepreneurship_Module 9
 Target

Choosing the right supplier involves much more than scanning a series of
price lists. Your choice will depend on a wide range of factors such as value for
money, quality, reliability, and service. How you weigh up the importance of these
different factors will be based on your business priorities and strategy.
Businesses focus on performance that is why companies have to look the right
supplier, just as they have to look the right employees. The interconnectedness of
every element needs to play an appropriate role to have a successful supply chain.
In the previous lesson, you have discussed the basic understanding on how to
validate the service description of the product, which is essential to ensure, that
suppliers are providing the highest quality product and services.
This module will help you understand more on how to illustrates a step-by step
approach you can follow that should help you make the right choices. It will help
you decide what you need in a supplier, identify potential suppliers, and choose your
supplier. After going through this module, you are expected to:

MOST ESSENTIAL LEARNING COMPETENCY:

1. Select/pinpoint potential suppliers of raw materials and other inputs

necessary for the production of the product or service
2. Discuss the value/supply chain in relation to the business enterprise.
(TLE_ICTAN11/12EM-Ia-2)

Subtasks:

a. Identify potential suppliers and factors to consider in potential suppliers

of raw materials and other inputs;
b. Understand the concept of value/supply chain;
c. Differentiate value chain and supply chain; and
d. Discuss the value chain process.

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LU_ Entrepreneurship_Module 9
 Jumpstart

Activity 1:

Direction: If you are an owner of a business, write five (5) possible criteria or factors
to consider in selecting the potential supplier of your product using the graphic
organizer. Briefly discuss each factors below. Use another sheet of paper for your
answer.

SUPPLIER’S
CRITERIA

Scoring Rubric
Indicator Moderate Strong Strong Evidence Very Strong Evidence
Evidence (1 - 2 (3-4 points) (5 points)
points)
Quality of Learners did Some details may Most details are
Work/ some of the not be reflected correctly reflected in
Understanding information, but accurately in in the the table. It includes
it has missing table. It may be all necessary
significant missing and hard information that is
details. to understand. easy to understand

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LU_ Entrepreneurship_Module 9
 Discover

Potential Suppliers of Raw Materials

The most effective suppliers are those who offer products or services that
match - or exceed - the needs of your business. So, when you are looking for
suppliers, it's best to be sure of your business needs and what you want to achieve
by buying, rather than simply paying for what suppliers want to sell.

IDENTIFYING POTENTIAL SUPPLIERS:

You can find suppliers through a variety of channels. It is best to build up
a shortlist of possible suppliers through a combination of sources to give you a
broader base to choose from.
1. Recommendations=ask friends and business acquaintances. You're more
likely to get an honest assessment of a business' strengths and weaknesses
from someone who has used its services.

2. Directories=if you're looking for a supplier in your local area, it's worth trying
directories such as Yellow Pages.

3. Trade associations=if your needs are specific to a particular trade or

industry, there will probably be a trade association that can match you with
suitable suppliers.

4. Business advisors= local business-support organizations, such as chambers

of commerce, can often point you in the direction of potential suppliers.

5. Exhibitions=offer a great opportunity to talk with a number of potential

suppliers in the same place at the same time. Before you go to an exhibition,
it's a good idea to check that the exhibitors are relevant and suitable for your
business.

6. Trade press=trade magazines feature advertisements from potential

suppliers.

GETTING THE RIGHT SUPPLIER FOR YOUR BUSINESS:

1. Know your needs=make sure you know what you need.

2. Spend time on research=choosing the right suppliers is essential for your

business. Don't try to save time by buying from the first supplier you find that
may be suitable.

3. Ask around=people or other businesses with first-hand experience of

suppliers can give you useful advice.

4. Credit check potential suppliers=it's always worth making sure your

supplier has sufficiently strong cash flow to deliver what you want, when you
need it. A credit check will also help reassure you that they won't go out of
business when you need them most.
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 5. Price isn't everything=other factors are equally important when choosing a
supplier - reliability and speed, for example. If you buy cheaply but
persistently let down your customers as a result, they'll start to look
elsewhere.

6. Don't buy from too many suppliers=selecting the right suppliers is essential
for building a successful business. By employing some supplier's selection
criteria, it is possible to identify enterprises who are reliable and meet your
particular needs.

HERE ARE SOME FACTORS TO CONSIDER IN SELECTING POTENTIAL

SUPPLIERS OF RAW MATERIALS AND OTHER INPUTS:

1. Price =if you focused on managing your finances, a main consideration for
selecting suppliers is affordability yet possesses a good quality product.

2. Reliability=developing a closer relationship with a reliable supplier means

getting quality, timeliness, innovation, and competitiveness, which are all
assets in continuously receive throughout the supply chain relationship.

3. Stability =look for qualified suppliers who have been in business for a long
time. Stability is important, when entering a long-term contract with a
supplier. Conduct performance reviews on their credit history to see if they
are financially stable. It requires also in finding out what businesses use a
specific supplier's services and asking them for a reference.

4. Location =consider about location when selecting suppliers. Dealing with

distant suppliers might provide you a longer delivery time and extra load costs.
If you need it fast, a local supplier might be a better option. Be sure to check
on the freight policies of distant suppliers. For instance, bulk orders might
get a free shipping, or you might combine different orders to reduce costs.

5. Developing Partnerships =basically, the supplier’s relationship is at its best

when a strategic partnership is made, allowing full facts of the source of
materials, and guaranteeing high quality.

A supplier is with a stronger business partnership if it provides the following:

1. Do in advance, what is required from the manufacturer and start to take the
leadership role in communication.

2. Notify and communicate the manufacturer if quality problem is identified that

limit production availability.

This type of partnership promotes stronger commitments and encourages a greater

interest in success for the material and finished goods.

Following these factors will enable you to select suppliers who can support to improve
your productivity, ensure you to produce quality goods/services within budget.

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LU_ Entrepreneurship_Module 9
 Value/Supply Chain
In business, there are forms to be done that anybody has to see its benefits. One
such form is implementing successful value chain. Value and supply chain often
used interchangeably. Yet, there is a difference between these two models. Supply
chain management and value chain management are connected both in the
processes involved in getting goods from the enterprise board, through purchasing,
manufacturing, and into the hands of consumers. However, each discipline views the
process from a unique standpoint, and with different objectives.

Let us examine value chain management and supply chain management and their
differences to help us understand how they influence your business.

https://www.cmtc.com/hsfs/hubfs/Value_Chain_V._Supply_Chain_flows.jpg?width=500
&height=356&name=Value_Chain_V._Supply_Chain_flows.jpg

Figure 1. Value Chain and Supply Chain- A Different Perception

Figure 1 shows that in supply chain, it starts from the source flows outward to the
customer. On the other hand, the value chain starts with the customer and flows
inward to supplier.

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LU_ Entrepreneurship_Module 9
In addition, Table 1 indicates also on the differences of the two models:

BASIS SUPPLY CHAIN VALUE CHAIN

Definition The integration of all the

activities that starts from the The series of input activities
manufacturing of raw material that focuses on creating or
into the finished product and adding value to the product
ends when the product for its valued customers
reaches the final customer. which often involves finding
the raw material for
manufacturers or just
simply packaging and
marketing for retailers.

Origin Operation Management Business Management

Concept Transmission Added-Value

Structure Product Request - Supply Customer Request - Value

Chain - Customer Chain - Product

Goal Customer Satisfaction Gaining competitive strength

https://keydifferences.com/difference-between-supply-chain-and-value-chain.html#ComparisonChart
Table 1. Value and Supply Chain Comparison Chart

Supply Chain
 Defined as a tool of business conversion that reduces costs and maximizes
customer satisfaction by providing the right product at the right price at right
time at the right place and. It involves all activities in the distribution through
a product transmission that reaches the final user while remaining profitable
and competitive.
 Uses a process that control and plans the operation known as Supply Chain
Management. It manages the flow of raw material, within the business and
the flow of finished product to the end user along with full customer
satisfaction.

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LU_ Entrepreneurship_Module 9
THERE ARE FIVE (5) MAIN ELEMENTS OF SUPPLY CHAIN MANAGEMENT:

1. Producing and designing a product to meet consumer request

2. Obtaining the raw materials required to produce the products
3. Manufacturing and developing the products
4. Distributing the product to consumers/customer
5. Accepting and processing returns of defective products

When the process done effectively, the costs of materials and efficient
transport may reduce its costs for the consumer while increasing profits for the
manufacturer.

Value Chain

Michael Porter pioneered the concept of value chain in his 1985 book "Competitive
Advantage: Creating and Sustaining Superior Performance." He used this concept to
show businesses add value to their raw materials to produce products that finally
sold to the market.

There are five steps in the value chain process, which allows a company to have
a competitive strength over other competitors. The five steps are:
1. Inbound Logistics: Deals with receiving, storing and inventory control.

2. Operations: Value-creating activities that convert inputs into finished

products such as assembly and manufacturing.

3. Outbound Logistics: Activities concerned with the collection, storage, and

distribution of finished product or service to customers.

4. Marketing and Sales: Involve activities that associated among the general
consumers or buyers to purchase a product.

5. Service: Activities that maintain and enhance the value of the product, such
as customer care and warranty package.

Supply chain is as significant as a value chain to the business world. The two
models are difficult to separate in that most of their functions connect. Both supply
and value chains need transportation and storage and end with the consumer
receiving their goods/service. Both have similar goal that is to satisfy the customers
with your products while operating efficiently and effectively, in order to give the
business a better bottom line but take somewhat different tracks to get there.

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LU_ Entrepreneurship_Module 9
 Explore

Here is an activity for you to work on to master and strengthen the basic
concepts you have learned from this lesson.

Activity 1:

Direction: Read each item carefully. Choose the letter of the correct answer in the
box and write it in a separate sheet.

A. Develop Partnership E. Stability I. Recruiting

B. Inbound Logistics F. Service J. Price
C. Outbound logistics G. Value Chain K. Culture Fit
D. Operations H. Career-Oriented L. Supply Chain

___1. The ability of the supplier who have been in the business for a long period.
___2. It involves all activities in the distribution through a product transmission to
the final user.
___3. An activity that maintains and enhance the value of the product, such as
customer care and warranty package.
___4. A factor of selecting potential supplier that focused on managing your finances.

___5. The ability of qualified candidate that fits in and adjusts to your business’s
culture.

___6. The series of activities that focuses on adding value to the product for its valued
customer.

___7. An activity concerned with the collection, storage, and distribution of finished
product or service to customers.

___8. The processes of the companies use to find qualified candidates to fill job
openings.

___9. Value-creating activities that convert inputs into finished products such as
assembly and manufacturing.

___10. A supplier’s relationship promotes stronger commitments and encourages a

greater interest in success for the material and finished goods.

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LU_ Entrepreneurship_Module 9
 Deepen

A. Activity 1. (Note: Scoring answers in all activities that need explanation and
discussion, below the questions is the rubric in scoring your answers.)

Direction: Conduct an interview or survey of an entrepreneur nearby your area

through answering the following questions below.

Guide Questions:

1. What is your name (optional): _____________________________________________

2. What is the type of your business: _________________________________________
3. What is/are your product: _________________________________________________
4. Who is/are our supplier/s of your product: _________________________________
5. Do you stick to only one supplier? Why? ____________________________________
6. Why did you choose (Name of Supplier) as the main source of your product?

B. Direction. Create a report on the gathered details in A. List down the

different factors used or applied in the activity at the end of the report.
_____________________________________________________________________________
_________________________________________________________________________________

Scoring Rubric
Indicator Moderate Strong Strong Evidence Very Strong Evidence
Evidence (1 - 2 (3-4 points) (5 points)
points)
Quality of Learners did Some details may Most details are
Work/ some of the not be reflected correctly reflected in
Understanding information, but accurately in in the the table. It includes
it has missing table. It may be all necessary
significant missing and hard information that is
details. to understand. easy to understand

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LU_ Entrepreneurship_Module 9
 Gauge

Assessment:

Direction: Read each item carefully. Choose the letter of the correct answer and write
it in a separate sheet.
1. Which of the following is an advantage to a supplier of delivering products on time
consistently?
A. Lower payment B. Repeating orders
C. Lower trading cost D. Minimal buffer stock consumed

2. Which of the following factor to consider as the most important choosing the right
suppliers?
A. Price B. Location
C. Reliability D. Partnership

3. Which of the following is the initial stage in a supply chain for a candy bar?
A. The supplier of sugar
B. The seller of the candy bar.
C. The manufacturer of the candy bar
D. Transportation between each stage of the candy bar

4. Which area of business will particularly focus to ensure deliveries of product to

customer arrive on time?
A. Sales B. Finance
C. Logistics D. Marketing

5. Manufacturer X and Y supply manufacturer Z, which supplies customers A and

B. Which of the following statements is best?
A. Supply chain for manufacturer X includes Y, Z, A& B.
B. Supply chain for manufacture Y includes X, Z,A&B
C. The supply chain for company Z includes X, Y, A&B
D. All the above.

6. Which of the following statements is TRUE?

A. The supply chain integrates all activities and processes to provide a product
or service to the end user.
B. Raw material in the supply chain typically flows from customer to producer.
C. The supply chain involves only one supplier.
D. All of the above.

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LU_ Entrepreneurship_Module 9
7. Which of the following generates the best source of the recommendation for a
potential job candidate?
A. Internet B. Employee referral
C. Company Website D. Recruiting organizations

8.Why manufacturing is important to the economy?

A. It adds value to products and services
B. It supports service and production.
C. It creates wealth.
D. All of the above

9.Which of the following best describe the importance of recruiting?

A. To determine whether to use inside or outside candidates.
B. To predict the short-term supply candidates.
C. To develop and increase the pool of applicant
D. To create positive story about a company.

10.What is the initial step in the recruitment process?

A. Perform candidate background checks.
B. Decide what positions needs to fill.
C. Perform an initial interview.
D. Create a pool of candidates.

Great job! You are done with this

module.

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LU_ Entrepreneurship_Module 9
 LU_ Entrepreneurship_Module 9
12
EXPLORE:
1.E
2.L
3.F
4.J
5.K
6.G
7C
8.I
9.D
10 .A
GAUGE:
1. B
2. D
3. A
4. C
5. C
6. A
7. B
8. D
9. C
10.B
Answer Key
References:

Online Resources

Eldridge, Bradd. (2012, August-September). Supplier Management: Six Steps to

Selecting the Right Supplier. https://www.foodsafetymagazine.com/ magazine-
archive1/-/supplier-management-six-steps-to-selecting-the-rightsupplier/

Heathfield, Susan M. (2019, August 29). 10 Tips for Successful Employee,

Recruitment https://www.thebalancecareers.com/top-tips-for-successful-
employee-recruiting1918953

O’Byrne, Rob. (2017, Jan 18). The Supply Chain and the Value Chain: The Same
but Different?, https://www.supplychainsecrets.com/the-supply-chain-and-
the-valuechain-the-same-but-different/

Stevens, Courtenay. (2020, November 09). How to Choose the Right Supplier
for Your Business. https://www.business.org/finance/inventory-
management/ how-to-choose-the-right-supplier-for-your-business/

Surbhi S. (2015, October 1). Difference Between Supply Chain and Value Chain,
https://keydifferences.com/difference-between-supply-chain-and-value-
chain.html

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 For inquiries or feedback, please write or call:

Department of Education – SDO La Union

Curriculum Implementation Division
Learning Resource Management Section
Flores St. Catbangen, San Fernando City La Union 2500
Telephone: (072) 607 - 8127
Telefax: (072) 205 - 0046
Email Address:
launion@deped.gov.ph
lrm.launion@deped.gov.ph

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LU_ Entrepreneurship_Module 9