The best PC suppliersvalue purchasing highly
By Susan Avery -- Purchasing, 11/19/1998
Perhaps the most important trait that desktop PC buyers use to measure supplier performance is flexibility. For some PC buyers, flexibility is reflected in the service that the supplier provides customers. For others, the trait is most visible in a supplier's capability to manage and reduce costs.At Bay Networks, Santa Clara, Calif., Elaine White, commodity manager, information systems, has selected a computer reseller to supply the networking equipment company with desktop PCs and peripherals. Traits that help make this supplier stand out for White are competitive pricing and reliable delivery performance.
Because Bay outsources much of its computer buy, White says that the reseller she's selected also must have "technical support capabilities." The supplier, in fact, provides Bay with onsite sales and technical support at its locations across the U.S.
Upon selecting the supplier, White thoroughly evaluated its distribution system and configuration center. This helps to ensure that her internal customers receive the desktop PCs that best meet their requirements.
For desktop PCs, Bay measures supplier performance of both its computer reseller and the OEMs that provide it with equipment.
In measuring supplier performance of computer OEMs, Bay looks specifically at the equipment the manufacturers provide purchasing's internal customers. Representatives of Bay's information-systems function evaluate the product's technical features as well as serviceability of the units. Since Bay maintains the units itself, IS checks the equipment to ensure that it will be easy for technicians to service. IS also evaluates the OEM supplier on its capability to provide technical support. Bay involves the reseller in these evaluations.
The reseller, as well as IS, end users, and purchasing, also helps Bay to establish new standards for computer equipment. In putting together new standards, purchasing specifically looks at the supplier's capability to provide competitive pricing and support for the new equipment. Whether the supplier values purchasing as a customer is another important trait that purchasing evaluates, says White.
Communication is how purchasing keeps the performance of desktop PC suppliers on track at Bay and other companies. Twice each year purchasing at Bay surveys its internal customers on their impressions of the PC supplier's performance. These customer-satisfaction surveys measure quality of the equipment and service levels the supplier provides.
Bay evaluates supplier performance quantifiably as well. Using root-cause analysis, purchasing measures, for instance, quality of supplier response to service calls from its internal customers.
In one case, White recalls, there was a discrepancy between service levels purchasing was requiring the reseller to meet and what end users were experiencing. Purchasing's internal customers, she learned by meeting with them, were not satisfied with the service that the reseller was providing. To alleviate the situation, purchasing altered the levels that were required so that they were more in line with customer expectations.
At Deere & Co., supplier flexibility is equally as important to Dave Schumaker, supply management specialist. He looks for a provider of desktop PCs to be proactive in cost management. Other criteria upon which Deere bases its supplier-selection decision include capability to drive continuous improvement throughout the supply chain, to deliver leading-edge technology, to have knowledge of the company's industry as well as the its internal processes, and to provide electronic commerce services.
Schumaker says purchasing ultimately selected a supplier with these capabilities--and similar management principles--to provide Deere's worldwide corporate headquarters in Moline, Ill., with desktop PCs.
One way that the supplier helps to manage Deere's purchasing costs is through its state-of-the-art pick-and-pack warehousing operation. "Everything that the supplier delivers to Deere is bar-coded," says Schumaker. This is important to Deere because it helps to rid the process of inefficiencies. "Mistakes add costs," says Schumaker.
The supplier's flexibility is readily apparent in its capability to work with big computer OEMs on providing Deere with the pricing and quality levels that it requires.
As at Bay Networks, communication is key to improving performance of desktop PC suppliers at Deere. Responsibility for the desktop PC buy, in fact, doesn't lie with one individual, says Schumaker. It is a team effort. A team made up of representatives of end users, accounting, information services, legal, and supply management which communicates frequently with supplier personnel.
The measurement process currently at Deere monitors supplier cost management, delivery levels (ontime, accuracy of packing list and invoice, number of returns/credits), quality (of product and/or service as well as company--how it manages and trains its employees), and support. Finally, Deere also measures its suppliers on "wavelength," which includes attention to detail, attitude, commitment, initiative, and responsiveness.
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