Evaluate some Web resources

by Dr. Robert A. Kemp

Evaluation is a critically important element of our supply management process. We should be able to evaluate suppliers better, faster and with fewer resources.

This article, the third in a five-part series on supplier evaluation, introduces Web-based models as away to conduct better evaluations.

As you will recall, my introductory article to the series urged you to do three things: 1) evaluate your existing supplier evaluation system, 2) determine the size of the supplier list and categorize them by the “A, B, C” process, and 3) examine your team process for evaluations. The second article looked at traditional supplier evaluation models.

Clearly, supplier evaluation is important but time-consuming work.

I believe information technology and the Internet offer us an opportunity to speed the process and, at the same time, utilize more sophisticated analytical processes to collect, analyze and understand data.

In terms of supply management, and indeed most management processes, the Web is a significant tool, an enabler, that offers us tremendous communication, data collection and analytical capabilities. It includes many suppliers, but only a few provide dedicated supplier evaluation programs. The box on this page names four companies and includes their Web addresses. Each site introduces the company, its product lines and its organization. Each includes recent news releases and selected customer comments. These suppliers were selected only as examples, and are listed alphabetically.

This list does two things: 1) it shows that the opportunity for Web-based supplier evaluation processes exists today; and, 2) it offers you a quick way to get started.

As I noted in the first article, a major problem for supply managers conducting evaluations with traditional methods is the amount of time-consuming, face-to-face work for purchasing teams. Users attest to resource constraint as a big reason for looking to Web-based suppliers.

Ken Marcia of United Technologies says, “UTC is developing Web-based supplier programs at three levels: 1) monitoring supplier operations; 2) assessment of operations and capabilities; and, 3) developing improvement processes for the suppliers.”

He quickly notes that Web-based processes help UTC reduce the bottleneck caused by its own constrained resources.

Similarly, the Semiconductor Products Sector (SPS) of Motorola uses Web-based applications to perform assessments and evaluations.

“SPS has used a Web-based supplier performance rating system since early 2001,” says Motorola’s Bethany Heinrich. “This tool was designed to provide consistent performance data and feedback to Motorola suppliers on a quarterly basis. The Web has allowed the process to become more efficient, encouraging input from additional cross-functional team members.

“As a second phase to the process, SPS has worked on the development of a Web-based supply chain risk assessment tool to extend the data collection process throughout the supply chain. This process will concentrate on collecting data related to how suppliers work with their suppliers in both processes and risk reduction. Our goal is to gather better information faster, allowing us to be proactive in our sourcing strategies.”

As the coach, it’s clear to me that Web-based resources can provide several beneficial results. Foremost is the capability to provide comprehensive reports based on supplier input and industry information. Equally important is the power to provide more comprehensive data analyses and reports than ever before. They can be done economically and with less time. Web-based systems offer us a powerful way to communicate the reports and any requisite actions rapidly and securely to our supplier and the supply management team.

Finally, Web-based systems strategically change the need for face-to-face contact and interaction. Face-to-face interaction can now be about strategic issues and solutions for improvement rather than fact-finding missions and inspections.

Like the traditional supplier evaluation systems, Web-based systems require trust, openness and cooperation. For long-term success, it must be a “win-win” model.

Visit the sites to better understand what each can do for you and understand their differences. Clearly, we should use the same new supplier evaluation/selection processes with a Web-based supplier that you would with any other significant supplier.

Evaluation Web resources
Open Ratings, www.openratings.com
Supplier Insight, www.supplierinsight.com

Robert Kemp is a consultant, speaker and the former president of the Institute for Supply Management. He can be reached at kempr@mchsi.com.

This article appeared in the June/July 2002 issue of MRO Today magazine. Copyright 2002.

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