Heartland & Co. Om Case
Heartland & Company
1. What are the advantages of basing a supplier’s overall evaluation on its lowest performance on one of the five dimensions (Quality, Delivery, Cost Management, Technical Support, and Wavelength)? What are the disadvantages? Overall, do you think that basing a supplier’s overall evaluation on its lowest performance on one dimension is a good idea or not? Why or why not?
There are a couple advantages of basing a supplier’s overall evaluation on its lowest performance measure. One such advantage is that it is a clear and simple way of eliminating suppliers that measure poorly against suppliers that measure highly to a company. It also is a simple way to determine the major flaws of a particular supplier and how that supplier relationship is affecting the business negatively. For example, if it is absolutely essential to your business to have strong technical support from your suppliers than the company can easily eliminate suppliers that do not fulfill these needs.
This method also has its fair share of disadvantages. The most evident disadvantage is that the dimensions all play an important part in the supplier relationship so to focus on one and ignore the rest would be a recipe for disaster. For example, if a company rates very poorly on delivery but they are rated highly in other important areas such as quality and cost management, the company may be willing to wait out longer delivery times because they value these other dimensions more highly.
I believe that evaluating a supplier on its lowest performance in one dimension is a poor management decision. To only take into consideration one dimension when many dimensions play into the supplier/manufacturer relationship is to make a poorly thought out and careless decision. For this reason I believe that companies should utilize the Factor Rating Method and use weighted averages for each dimension in order to get a better understanding of a supplier’s overall value to a
1. What are the advantages of basing a supplier’s overall evaluation on its lowest performance on one of the five dimensions (Quality, Delivery, Cost Management, Technical Support, and Wavelength)? What are the disadvantages? Overall, do you think that basing a supplier’s overall evaluation on its lowest performance on one dimension is a good idea or not? Why or why not?
There are a couple advantages of basing a supplier’s overall evaluation on its lowest performance measure. One such advantage is that it is a clear and simple way of eliminating suppliers that measure poorly against suppliers that measure highly to a company. It also is a simple way to determine the major flaws of a particular supplier and how that supplier relationship is affecting the business negatively. For example, if it is absolutely essential to your business to have strong technical support from your suppliers than the company can easily eliminate suppliers that do not fulfill these needs.
This method also has its fair share of disadvantages. The most evident disadvantage is that the dimensions all play an important part in the supplier relationship so to focus on one and ignore the rest would be a recipe for disaster. For example, if a company rates very poorly on delivery but they are rated highly in other important areas such as quality and cost management, the company may be willing to wait out longer delivery times because they value these other dimensions more highly.
I believe that evaluating a supplier on its lowest performance in one dimension is a poor management decision. To only take into consideration one dimension when many dimensions play into the supplier/manufacturer relationship is to make a poorly thought out and careless decision. For this reason I believe that companies should utilize the Factor Rating Method and use weighted averages for each dimension in order to get a better understanding of a supplier’s overall value to a