Assignment 3: Supplier Selection Strategies and Criteria

Assignment 3: Supplier Selection Strategies and Criteria Ifeoluwapo Sonuyi, Richard Joseph Prepared for Professor Terry Hickey Program: Principles of Buying (BUSI 3024) Loyalist College November 18, 2015 Supplier Selection Strategies and Criteria Introduction This paper speaks about companies realise that a large amount of direct and indirect profits can be obtained from effective and efficient supply chain management practices. Supplier selection has great impact on integration of the supply chain relationship. Effective and accurate supplier selection decisions are significant components for productions and logistics management in many firms to enhance their organizational performance. An integrated framework for deciding about supplier selection criteria in food supply chain and manufacturing is crucial in achieving this goal. Supplier selection criteria for a particular product or service category should be defined by a “cross-functional” team of representatives from different sectors of your organization (discussed in Organisational Theory and Design). In a manufacturing company, for example, members of the team typically would include representatives from purchasing, quality, engineering and production. Team members should include personnel with technical/applications knowledge of the product or service to be purchased, as well as members of the department that uses the purchased item. Common supplier selection criteria: Previous experience and past performance with the product/service to be purchased. Relative level of sophistication of the quality system, including meeting regulatory requirements or mandated quality system registration (for example, ISO 9001, QS-9000). Ability to meet current and potential capacity requirements, and do so on the desired delivery schedule. Financial stability. Technical support availability and willingness to participate as a partner in developing and optimizing design and a long-term relationship. Total cost of dealing with the supplier (including material cost, communications methods, inventory requirements and incoming verification required). The supplier's track record for business-performance improvement. Total cost assessment. Methods for determining how well a potential supplier fits the criteria: Obtaining a Dun & Bradstreet or other publicly available financial report. Requesting a formal quote, which includes providing the supplier with specifications and other requirements (for example, testing). Visits to the supplier by management and/or the selection team. Confirmation of quality system status either by on-site assessment, a written survey or request for a certificate of quality system registration. Discussions with other customers served by the supplier. Review of databases or industry sources for the product line and supplier. Evaluation (SUCH AS prototyping, lab tests, OR validation testing) of samples obtained from the supplier. (Russ Westcott, The certified manager of quality/organizational excellence, pages 492-493) Let us now look at some of the potential suppliers for Human Resource Solutions available in the market. We will also review their capabilities and assess the Pro’s and Con’s to arrive at the best solution. Requirement: Small Ontario College wants to outsource its HR needs all basic functions. Option 1: Focused HR (171 Marycroft Avenue, Suite 101-B, Vaughan, Ontario, L4L 5Y3) Focused HR is a Human Resources Consulting firm in Vaughan Ontario. Helping small, medium and enterprise organizations / businesses with their employee management and employee performance, handbook and policies and procedures and productivity issues throughout the York Region and GTA Ontario Canada. The FocusedHR Human Resources Solutions Group has over 50 years of combined human resources experience in diverse sectors including, manufacturing, distribution, retail, pharmaceutical, energy, construction and healthcare. Option 2: Pivotal Integrated HR Solutions (420 Britannia Rd E, Unit 108, Mississauga, ON L4Z 3L5) Over the past 30 years PIVOTAL Integrated HR Solutions has grown to become a leader in providing the broadest range of HR solutions for small and mid-size companies in Canada. Our goal is to provide flexible people solutions that help organizations achieve a competitive advantage from their workforce. Option 3: Ceridian Canada Ltd (NA) As a leader in human capital management (HCM), Ceridian helps clients of all business sizes to optimize their workforce, reduce costs, ensure compliance and save time by recruiting, paying, developing, deploying, and engaging their talent. We achieve this by offering a full range of best practice HR solutions including Payroll, EAP/Health & Wellness, Recruiting and Consultation services. Option 4: Salopek & Associates (NA) Salopek & Associates is a collaborative team of CHRP Certified HR and Business Consultants working across Canada to provide our clients with a depth of HR expertise and knowledge that is available 24/7 to support employee attraction, retention and continued business growth. Option 5: Techalliance (8-1362 Lambton Mall Road, #232, Sarnia Ontario, N7S 5A1) Integral HR Solutions Inc. provides strategic Human Resources support to a wide variety of clients throughout North America. In addition to the leadership development and corporate training programs Anthony facilitates; a primary focus is placed on assisting organizations create and align best in class HR practices and strategies that support strategic business plans while driving cultural change. Our areas of expertise include, Leadership Training & Development, Managing Organizational Change, Creating Performance Management Systems, Coaching Front Line Management, Employee Assessment, Employee Engagement Interventions, Employee & Labour Relations, Succession Planning, Recruitment & Selection, Workplace Investigations and Executive Coaching. Small Ontario College has recently been established in the 2014, it’s a new institution which provides instruction in the skills and knowledge required in order to get a job in a particular vocation. Currently SOC has a total of 80 members of staff Members of staff. The College is keen on focusing all its attention towards training and education and hence is decided to outsource the Human Resource function to a third party company. Above mention companies are being evaluated to decide on the solution providers, in order to arrive at a best available option they are considering the below mentioned factors/criteria’s: Criteria's (Scale -High (H), Medium(M) and Low(L)) Focused HR Pivotal Integrated HR Solutions Ceridian Canada Ltd (NA) Salopek & Associates (NA) Techalliance Human Capital Management H L M H M             Recruiting H L M H H             Payroll and HRIS Solutions M H M H H             Deploying Talent (Workforce Management) M H L H M             Developing Talent -Training and Employee Development L L L L M             Engaging Talent - Employee Assistance Programs M L L L H             Total High 2    2   0   4   3 Medium 3   0   3   0   3 Low 1   4   3   2   0  Potential 3 *        * * Criteria Analysis Considering the fact Small Ontario College is a new institution, there are certain aspects of the needs that are more pressing than others, bearing this in mind, we have identified those three major factors which include; Recruiting: This is perhaps the most important factor that was considered in the shortlisting of potential suppliers considering the fact that as a new institution, hiring the right employees i.e. for the various roles required for such an outfit to run is a major challenge and if done right, would be a pivotal factor in its success. Right people for the right jobs! Payroll and HRIS Solutions: One of the most significant aspects of Human Resource management is managing Pay and Benefits of employees working for its organization. This is a significant overhead cost for any start-up company as it brings with it the need for a Human Resources department, human resources/payroll information systems and the associated hardware required to run these solutions. Also considering the number of employees we would potentially hire, there would be a need to efficiently manage the payment process for each employee, this could be really complex as a result of the many elements of payroll, e.g. pension deductions, tax deductions etc. and so we require a system that would help significantly reduce the time and effort that would be required to run this process seamlessly. Deploying Talent (Workforce Management): Another major factor that Small Ontario College has considered is the deployment of talent within the institution i.e. determining based on factors like education, experience etc. the appropriate individuals that would function most effectively in their assigned roles. Shortlisted Suppliers In regard to the criteria discussed above, we have shortlisted three suppliers namely; Focused HR, Salopek & Associates and Techalliance. Focused HR were shortlisted because they scored high against the ‘Recruiting’ factor and medium against both ‘Payroll and HRIS Solutions’ and ‘Deploying Talent’ which are the most pressing areas of need for Small Ontario College and in comparison to the remaining potential suppliers, Focused HR would be a better option than Ceridian Canada Ltd and Pivotal Integrated HR Solutions. Salopek & Associates scored high in all three pressing categories and are an obvious choice for shortlisting, while Techalliance scored ‘high’, ‘high’, ‘medium’ against the ‘Recruiting’, ‘Payroll and HRIS Solutions’ and ‘Deploying Talent’ factors respectively and so have also been shortlisted to be among the top three choices for the outsourcing of the human resource function by Small Ontario College. Having established this, we are constrained to the selection of just one supplier to meet the criteria we have highlighted as most important and so we would not split these various segments of our identified needs among the top three suppliers. With this in mind, all three suppliers were in a position to provide the service at similar costs with negligible differences between them. It is clear that cost does not stand out as a deciding factor and so we have selected Salopek & Associates as our final choice mostly due to the fact that they scored high against all three parameters that have driven our selection process. Techalliance would have been chosen by merely looking at the number of ‘highs’ and ‘mediums’ that they have, however, if we compare those parameters which we have just spoken of, they scored a ‘medium’ against ‘Deploying Talent’ while Salopek & Associates scored a ‘high’. Conclusion Supplier Selection goes beyond the more obvious criteria like costs, short delivery times etc. and factors in other elements like those which we have analysed in this report. These elements are usually determined based on the scenario which is supported by the identified need of the organization in question. Supplier Selection is a dynamic process which caters to the needs specific to an organization. References 18 Steps to Selecting a Human Resource Information System. (n.d.). Retrieved November 18, 2015, from http://www.hrrevolution.com/Articles/Selecting_HRIS/ Supplier Selection Part 1: Important Factors to Consider Before Starting Your Search | CCS-Inc. (n.d.). Retrieved November 18, 2015, from http://www.ccs-inc.com/blog/article/supplier-selection-part-1-important-factors-consider-before-starting-search Westcott, R. (2013.). The certified manager of quality/organizational excellence handbook (Third ed.). Supplier Selection 10 Running Head: Supplier Selection 1