Supplier selection in purchasing management should be considered from the perspectives of (market conditions, product complexity or technological change, urgency of need, quality expectations, supplier procedures, sufficient competition, cost and value of sources, and long-term needs).
1. Market conditions. If the buyer is working with only one supplier, it needs to monitor market conditions more closely to ensure that the supplier remains competitive.
2. Product complexity or technological change. An established supplier may be the sole owner of a particular patent or program, precluding the use of other sources.
3. Urgency of need. The establishment of a new supplier inevitably involves time and experience in training that business, and it may be less practical to use a new supplier if the product is needed quickly.
4. Quality expectations. Existing suppliers may be so outstanding in terms of quality that sourcing elsewhere will not be a serious consideration; on the other hand, if the quality of an existing supplier is barely acceptable, it is worth giving serious consideration to a new supplier.
5. Supplier program. How suppliers produce and sell products and services and to what extent suppliers outsource.
6. Sufficient competition. New suppliers may offer programs to expand supply options and competition.
7. Cost and value of sources. The purchase price of a particular product may be as little as 1/3 of the total cost of holding.Consistency of supply is the primary concern of the purchaser, and purchase price may be a relatively unimportant matter.
8. Long-term demand. By looking for new sources of supply, buyers try to protect their supply chain in the event that an existing supplier fails to perform as agreed.
Procurement Planning
Procurement planning management develops and manages a company's purchasing plans, providing timely and accurate purchasing plans and execution routes. Purchasing plans include regular purchasing plans (e.g., weekly, monthly, quarterly, and annual), and non-regular purchasing task plans (e.g., generated by the system based on sales and production needs).
Through the compilation and decomposition of multi-object and multi-element procurement plan, the enterprise's procurement needs become direct procurement tasks. The system supports a variety of procurement application modes for enterprises to purchase by sales, to purchase by sales, to purchase by production, and to support a variety of settings for flexible purchase order generation process.