Free Why Do We Need Clear Guidelines For PRE-Qualification Of Suppliers? Essay Sample

An efficient procurement management system is critical in order to maximise the productivity of Freeworld Technologies Limited. To develop such a system, the company needs suppliers and vendors who should obviously be the best around. To ensure that the company works with the best, there is need to have a formal structure for selecting these suppliers and vendors.

A selection criterion is important as it will ensure that the company chooses top notch suppliers who will be able to deliver products and services on time and in the right quantity and quality (Poulsen, 2014). Secondly, it will provide a basis to monitor the suppliers’ performance in the course of their engagement with the company. This view is supported by Abdloshah (2012) who argues that, as a barometer, pre-qualification will ensure the company retains only the best suppliers while doing away with those who perform below par. Eldrige (2012) also adds that a selection criterion will ensure that the company has on board only suppliers that are cost effective as this may lead to some savings in the company’s inputs.

Selection criteria

Quality systems
Eligible suppliers for the company should have the ability to supply quality inputs. Quality would be assessed based on the products’ ability to meet the set benchmarks of the country’s standards body, as well as the company’s quality assurance department.

Past performance

The company will seek to engage past and present customers of the interested suppliers in order to gauge their level of satisfaction with their product offering. Only suppliers who will attract the highest ratings will be pre-qualified by our company.

Level of after sale services

The suppliers should be able to offer technical support in the installation and servicing of the equipment that they supply to the company at a subsidised fee or no cost.

Total cost outlay

Eligible suppliers and vendors should supply the company at a relatively lower cost than the average while still maintaining a high quality of their products. It, therefore, calls for efficiency in their production processes in order for them to sell to us at relatively lower prices.

Sufficient capacity

Pre-qualified suppliers should have the capacity to meet our demands at any particular time. This calls for ability to prove a stable financial position as well as a dynamic production process.
Our competitors have leveraged on these criteria to acquire a competitive advantage over the company. A case in point is our fierce competitor Malcolm Technologies Ltd that has made use of the same processes, leading to an increase in their market share from 23% to 29% over the past year while our market share stagnated at 25%. Their management attributes this to the adoption of improved relationships with suppliers. While our criterion largely borrows from them, we seek to offer stronger checks and balances for each of our criterion in order to claw back our market position. It is crucial to note that our equipment has been breaking down many times lately, and this can be attributed to the lack of a formal process to select the best equipment maintainers. The cost of our supplies has also spiralled, and this can also be attributed to the lack of prequalified office suppliers.
It is my sincere hope that this prequalification system will be implemented as soon as possible in order to ensure that the we get the best equipment technicians and office suppliers for the current financial year and hopefully for the next financial year as well.

References

Abdloshah. M. (2012, December. 31) A Review of Quality Criteria Affecting Selection
Retrieved March., 23, 2015, from http/www.hindawi.com/journals/jqre/2013/621073/
Poulsen, L. (2014) How to Choose the Right Supplier for Your Business Retrieved
March., 23, 2015, from
http/www.businessbee.com/resources/operations/suppliermanagement/how-to
choose-the-right-supplier-for-your-business/
Eldridge, Bradd. (2012, September) Supplier management: Six Steps to Selecting the Right
Supplier Retrieved March, 23, 2015, from
http/www.foodsafetymagazine.com/magazine-archive1/augustseptember
2012/supplier-management-six-steps-to-selecting-the-right-supplier/