So welcome to part 2 Strategic Sourcing, where we covered two others in week 1, we're now going to cover the next two. So the next step in the seven step process is to generate supplier profiles. So what you want to do here is go back to your stakeholders or go to your information databases, find out all the existing suppliers that we have. Maybe through the first two or profiling the category and developing the strategy, you found some additional suppliers you want to identify them. Start to establish some minimum requirements that you have to have, maybe from a financial perspective or close to your office. You're going to put a supplier selection criteria and then you got to develop that. We'll take a look at that. So the two things here is a long list of potential suppliers and the criteria. So we've identified quite a few suppliers through this. We found a lot of existing ones and remember that because it wasn't just marketing, some things were in sales, some things were in HR, etc. There are a lot of different suppliers being used so we got that information and through the process we found some new ones. We sent out a request for information to about 30 of these suppliers to learn more about them where they were, what their financial capability looks like, where their plants are located, who their major customers, etc. Get some research on all of these, we looked at cost structure, financial status. I'm not going to go through all these, but culture can be an important one. So these are both hard numbers as well as soft things like culture. You're trying to evaluate out of all these suppliers which ones are the best to take to the next stage and we did. So we identified these suppliers, both existing and new. We got to request from information. We did a fair amount of research on these. We actually narrowed it down from about 30-20 and we did a SWOT analysis. So this particular one isn't for printed materials, it's just an example but you're probably familiar with SWOT. You might have learned about it in MBA courses, it's very common: choose to evaluate companies, but also works equally well to evaluate suppliers. So these bullet points aren't meant to be for print materials but take a look at it. Maybe the particular group of suppliers you're worried about low product innovation, traditional unions could be a problem, threats could be maybe people are coming in from the overseas and taking away markets from these people. Could be opportunities maybe they have some technology that you want to know about or strength. What's their customer base like, are they good at printing multiple colors or such a things. So you can do this as you're narrowing your suppliers down to try to determine which are the best ones. So you're going to want to basically have some supplier selection criteria what's important to you coming off the SWOT analysis. You can do something like this which is initial supplier evaluation. This is not meant for print materials but as an example of quality systems, manager capabilities, financial conditions, etc. We're going to go through all of this again when we get to supplier management versus critical, how you select suppliers. I wanted to give you a few here. You can see it's hard to read in the very bottom. The total valuation here is 8.6, maybe out of the suppliers, you rank them from the highest rank to the lowest rank. This can help you determine what your best suppliers are going in. So we used something like this to take the 20 or so suppliers and got them to the top six which we felt were the strongest. Noticed here on this chart, just as a comparison, you can see everybody thinks prices is the most important. You can see it's the fourth highest one. That's not unusual. Usually people are more worried about other things such as quality and financial condition more than price but this is just an example. You can also use this initial supplier evaluation. You can do it with your stakeholders or do it with your teams to create buy-in for the whole team, can be a very strong tool to come up with the right answers. You're actually going to choose which suppliers you want to do business with and looking at alternate strategies of how you are going to do that. You want to select a path for and what are you going to do. So you've gone from 30-20-6. So now what are we going to do? Well, what we decided is that we were going to do both a competitive bidding and negotiation. With these six, we're going to leverage technology to get the quotations force. Basically this new tool was a requirement that they had to use this tool which they had to agree to. We got basically mixed it around. We had about four new suppliers and I think two new ones. We tried to pick some new ones just to break up the mix a little bit, better quality, bigger presses, faster turnaround. So we went ahead and did that and basically narrowed the suppliers down. We'll talk more about how we did that. So here we are, we did these two things. We generated a supplier profile of all the different suppliers and through our various process of using evaluation and research, we narrowed it down to the final four suppliers going in. So notice through these two steps that the source to stakeholders had been involved all the way through all seven steps put through these two steps also. So with that, we're going to stop here for part 2.
