Select/ Pinpoint

Potential
Suppliers of
Raw Materials
Raw materials
are the unprocessed and
basic material that is used
to produce goods, finished
products, energy, or
intermediate materials
which are feedstock for
future finished products.
CRUDE OIL LUMBER
which is a raw
material and a is a raw material
feedstock used in the used to produce a
production of
industrial chemicals, variety of products
fuels, plastics, and including furniture.
pharmaceutical goods;
Choosing the Right Supplier
The choice will depend on a wide range of factors
such as:

1. Value for money or the price.

2. Quality or how it works.

3. Reliability or dependability.

4. Service or benefits.
Guidelines to Identify Potential Supplier
1. Think strategically in selecting suppliers
2. Set criteria in choosing a supplier
3. Identifying potential suppliers
4. Drawing shortlist of suppliers
5. Choosing a suppliers
6. Getting the right supplier fitted to the
business.
Set Criteria in Choosing a Supplier
1.Reliability– state of
being reliable, worthy
of confidence and
dependable
2. Quality– a degree
of excellence, superior
in kind and high
distinguishing attribute.
3. Value of Money–
the lowest price does not
guarantee the best value
for money.
4. Suppliers should deliver on
time or be honest and give
plenty of warning. The best
suppliers that regularly communicate will
find out what are the need with customer
and how suppliers will serve better the
customers.
5. Financial security–
the supplier must be assured
that the company has
sufficiently strong cash flow to
deliver what the company
wants and its needs.
6. A partnership approach–
a strong relationship will benefit both
producer and supplier. It is more
likely to create the response by
showing the importance of suppliers
to the business.
Identifying Potential Suppliers
1. Recommendations from friends, business partners and
acquaintances.

2. Directories of a potential supplier in local area, website or yellow

pages.

3. Trade associations of a particular line of business.

4. Business advisors
5. Local businesses.

6. Exhibitions

7. Trade press

8. Trade magazines feature

advertisements
 Criteria to Evaluate Suppliers
1. Can these suppliers deliver what a company wants and deliver it on
the desired date and time?

2. Are the suppliers financially secured?

3. How long have the suppliers been established?

4. Are the suppliers recommended by other businesses?

5. Are they in any approved supplier lists from trade associations of

government?
Steps in Choosing a Potential Supplier
2. Compare potential
1. Get a written suppliers in terms of
3. Price is important
quotation. priorities of the
company.

4. Check if the people

5. The labor practices of
employed by the 6. Negotiate terms and
the suppliers will reflect
supplier for the conditions to the
on the business
production are doing suppliers.
reputation.
the work themselves.
 1. Know the Getting the
company
4. Price needs Right
Supplier
3. Get advice 2. Spend
from existing time on Fitted to the
customers research
Business
Consider the following:

1. Do not buy from too many

suppliers.
2. Limit the number of sources the
company is using. This is particularly the
case with low value-added suppliers.
3. It is always a smart strategy to having
an alternative supply source ready to
help in difficult times.
Learning Task 6: Look for a supplier and their profile in
the following raw materials.
Answers will be presented using Canva application.
1. Flour
2. Sugar
3. Milk
4. Rice
5. Wine
Value/ Supply
Chain
 Nature of Supply Chain
Management
Supply Chain Management (SCM)
is the supervision of materials,
information, and finance as they
move in a process from supplier to
manufacturer to wholesaler to
retailer to consumer.
Supply chain
activities:
1. Product development
2. Sourcing
3. Production
4. Logistics
5. Information systems.
1. Collaborative Effort
Efficiency– when managing
inventory, transportation and
logistics are difficult and
expensive for organizations that
do not have an effective systems.
2. Maximized Transportation
and Logistics– each company
is in charge in ordering,
shipping and transporting
goods. In this structure, costs
are high and timing is poor.
3. Quality Enhancement–
Getting consumers the best value
is a shared goal of supply chain
partners. To closely connect is the
objective of perpetual quality
improvement.
3. Quality Enhancement–
Getting consumers the best value
is a shared goal of supply chain
partners. To closely connect is the
objective of perpetual quality
improvement.
4. Long term Stability and
Relationship– through structuring
strong trusting supply chain
relationships and working toward best
practices in distribution, companies
aim for long-term stability and
relationship
4. Long term Stability and
Relationship– through structuring
strong trusting supply chain
relationships and working toward best
practices in distribution, companies
aim for long-term stability and
relationship
Key Process of Supply Chain Management
There are eight critical business processes in which supply
chain managers must focus:

1. Customer Relationship
Management– this will allow
companies to prioritize their marketing
focus on different customer groups
based on each group’s long-term value
to the company or supply chain.
2. Customer Service
Management– this is a multi-
company, unified system of
responding to customer’s
complaints, concerns, questions
or comments.
3. Demand Management– this
process tries to align supply and
demand throughout the supply
chain by foreseeing customer
requirements and creating an
action plan before actual
purchasing of customer.
4. Order-fulfillment– this
engages in generating,
filling, delivering and
providing on-the-spot
service for customer’s
orders.
5. Manufacturing Flow
Management– this ensures that
firms in the supply chain have the
necessary resources to produce
with flexibility and to move
products in a multi-stage
production process.
6. Supplier Relationship
Management– this provides
structural support for developing
and maintaining good
relationships especially with
highly valued suppliers in order to
gain performance advantages.
7. Product Development and
Commercialization– this
facilities the joint development
and marketing of new products
and services among a group of
supply chain partner firms.
8. Returns Management–
this enables firms to
manage volumes of
returned product efficiently
while minimizing related
costs.
Logistics

is the strategic managing of the

efficient flow and storage of raw
materials, in-process inventory and
finished goods from the point of
origin to point of consumption.
The supply chain entails a number of
interconnected logistical components which are:
1. Sourcing and Procurement– the
aim is to lessen the costs of raw
materials and supplies.
2. Production Scheduling– it calls
for additional products to be
manufactured.
3. Order Processing– it processes the
requirements of the customer and sends
the information into the supply chain
through the logistic information system
then to the warehouse.
4. Inventory Control– this system
develops and maintains enough variety of
materials or products to meet a
manufacturer’s or consumer’s demands.
5. Warehousing and Materials
Handling– storage aids manufacturers
manage supply and demand or
production and consumption.
6. Transportation– this concerns the
decision on the mode of transportation of
the goods from suppliers to producer and
from producer to customers.
a. Cost-the total amount of charge by the
carrier to move the product from point of origin
to destination.
b. Transit Time– the total time for the carrier
to pick-up, delivery,
handling and movement from point of origin to
destination.
c. Reliability– consistency of the carrier on
delivering the goods on time and satisfactory
condition, too.
d. Capability– the ability of the carrier to
provide applicable equipment and conditions
for moving the goods like those that must be
transported in a controlled environment.
e. Accessibility– the ability of the carrier to
transport the goods over a particular route or
network.
f. Traceability– the relative ease that a
shipment of goods can be located
and transferred.
A value chain is a set of
activities that a firm operates
activities in a specific
industry in order to deliver a
valuable product or service
to the market.
Learning Task 7:
Prepare a sample
value chain in your
favorite food chain.