8 Supplier Selection Criteria & The SHoCC
By Charles Dominick, SPSM, SPSM2, SPSM3
How Do You Prioritize Supplier Selection Criteria?
You should use a Sourcing Hierarchy of Constraints & Criteria (SHoCC) for every major sourcing process you lead. I'll explain the SHoCC by defining its components.
Criteria are attributes that a buying organization values in its arrangements with suppliers. There are eight common supplier selection criteria, in no formal order:
- Quality & Safety
- Social Responsibility
Depending on the situation, you may use them as-is, use more or fewer, or use a different combination of eight.
Often, sourcing team members will want some criteria to be treated as constraints - unbreakable rules in the supplier selection process. Examples of constraints include: there can only be one supplier, we must select the low bidder, delivery must be within six weeks, etc.
Your job as leader of the sourcing team is to determine whether the proposed constraint is a truly warranted constraint or simply an important criterion. You can do so by asking questions like "If we had to choose between (a) having the best quality for all items by using two suppliers and (b) having the best quality for only half the items by using one supplier, would we still insist on using one supplier?" or "If we could save 34% by accepting a seven week lead time instead, would we choose to save the money or would we still need to insist on the six week lead time?" The fewer constraints, the more flexibility the team has in its decision-making.
After agreeing on the constraints and criteria, the sourcing team must agree on a hierarchy - an order of these attributes from most important to least important, with constraints preceding criteria. In most cases, supplier offerings will differ and there will be tradeoffs involving the criteria: you may get a better price from one supplier (cost) but that supplier insists on contract terms less favorable to you (risk). Creating a SHoCC in advance will help your sourcing team remain focused on what's most important to make a balanced decision.
To learn more about supplier selection methods and to master the 7 critical steps of supplier selection, consider the online Express Course "7 Critical Steps of Effective Supplier Selection." Learn more by clicking here.
(keep reading for a FREE Offer)
Spotlight On Professional Development Opportunities
Are you tired of not getting enough opportunities, respect, and money out
of your purchasing career? Well, guess what? Nothing will change unless you take action towards
becoming a world-class purchasing professional.
You see, today's employers refuse to reward employees for yesterday's
skills.They demand that purchasing professionals like you use the most modern skills and achieve
unprecedented results. They want you to save more money, achieve better operational performance, and
Is lacking a purchasing certification keeping you from getting the results,
opportunities, respect, and money that you want out of your career? Today's employers refuse
to reward employees for yesterday's skills. They want you to save more money, achieve better
operational performance, and reduce risk. They demand that purchasing professionals like you achieve
unprecedented results and without the most modern skills that can be a challenging feat!
So how can you acquire the most modern skills, achieve meaningful results,
and convincingly prove your capabilities to today's employers? There is an impressive
purchasing certification program that will teach you what you need to accomplish all of this and more.
It is the SPSM® Certification, earned by completing the
Senior Professional in Supply Management® Program. And you could
earn it in less than a year - maybe even much less than a year!
SPSM® Certification by completing the Senior Professional in
Supply Management® Program
is the action to take if you want to bring the most modern purchasing practices into your organization
and achieve your career potential. Learn how to earn your SPSM® Certification
(and perhaps get an iPad)
(with the option of getting a Study Guide on an iPad)
Distinguishing yourself as an achiever in purchasing is key to sustaining a
rewarding career, even in these difficult economic times. Earning your SPSM®
Certification by completing the Senior Professional in Supply Management® Program
is to take if you want to bring the most modern purchasing practices into your organization and achieve
your career potential. Learn how to earn your SPSM® Certification (and perhaps get an
Earning your SPSM® Certification by completing
the Senior Professional in Supply Management® Program is the action
to take if you want to bring the most modern purchasing practices into your organization
and achieve your career potential. And if you sign up for
the Senior Professional in Supply Management® Program on or before May 31, 2008,
SPSMSM Certification Program on or before 4/30/2007,
you also get these and other bonuses valued at over $700:
- FREE $30 gift certificate to Amazon.com!
- FREE CD-ROM with printer-friendly versions of the class materials!
- FREE Purchasing Performance Measurement spreadsheet template!
- FREE audio CD about purchasing job security!
To learn how to earn your SPSM® Certification and get these valuable bonuses, visit:
Earning your Senior Professional in Supply Management® (SPSM)
Certification is the action to takeif you want to bring the most modern purchasing practices
into your organization and achieve your career potential. Learn how to earn your SPSMSM
Learn how to earn your SPSM®
The Latest Purchasing News!
- Purchasing Managers/Directors: Are you struggling to develop a plan
for improving your team's performance? If so, visit:
- Are you struggling to develop a plan for improving your team's
performance? If so, visit:
- Purchasing Managers/Directors: Are you struggling to develop
a plan for improving your team's performance? If so, visit:
- Procurement Managers/Directors: The year's almost half over. How's your team
development plan going? If not well (or not even developed yet), the NLPA may be able to help.
Learn more at:
- Purchasing Managers/Directors: Are you tired of having an underperforming team
and no plan to fix it? If so, we have good news for you! You may qualify for a free service that
hundreds of leading companies have used to benchmark, plan, and drive positive change. To learn more, visit:
- Do you supervise a purchasing team? If so, learn about a FREE service
that may be just for you at:
- Do you supervise other purchasers? We have a service just for you.
Read more at www.NextLevelPurchasing.com/manage
- Purchasing Managers: Does your team struggle to solve new problems,
overcome challenges, and identify ways to improve supply management performance? If so, visit:
- The NLPA recently announced the launch of the Strategic Procurement &
Supply Management Body of Knowledge®
- On social media? Share our new SPSM-BOK memes:
- The 2014 NLPA Conference was a tremendous success! Check out
photos on our Facebook page: www.facebook.com/NextLevelPurchasing
- Our friends at Vantage Partners are conducting a supplier relationship
research study and invite you to take a brief survey. By doing so, you'll get a findings report
and other related articles. Start at:https://www.surveymonkey.com/s/NLPASRM
- Learn how to beat our October 1, 2012 price increase. Read more at
- Looking to add to your collection of great purchasing education material?
Check out my podcast interview with Jason Busch!! You can download it for free at:
- Discuss today's topic on our LinkedIn SPSM Group! Visit
- Not a member of the LinkedIn SPSM Group? Learn how to join at:
- Chat with
other NLPA members! Log in at
- Chat with other purchasing professionals in the Next Level Purchasing Association's
Networking area. Log in at: www.NextLevelPurchasing.com/login.html
- Considering a career move? Browse over 80 jobs preferring candidates with the SPSM® Certification at:
- Purchasing Managers/Directors: Know the value of a certified team and want to
learn how to make it a reality? Download our "Executive's Guide to the SPSM Certification" at
Not sure if your procurement department is structured appropriately? Our new whitepaper entitled
"Separating A Procurement Department Into Tactical & Strategic Teams: Is It Right For Your Organization?" will
help you make that determination.
Copyright 2010. This article is the property of Next Level Purchasing
and may not be copied or republished in any form without the express written consent of Next Level Purchasing.
Click here to request
Free Procurement Training & Certification Starter Kit
This Starter Kit gives procurement professionals like you a clear idea on what it will take
to become certified. You'll get an excellent feel for what you will need to learn and
how long it will take.
Click here to learn more
Included in your free Starter Kit:
- Access to two lessons from courses that are part of the Senior Professional in
Supply Management® Program
- A Certification & Training Planning Template
- Case studies
- A free Basic Membership in the NLPA
Together, these materials will help you decide how well the SPSM® Certification can help you achieve your career goals.
So, what are you waiting for? Begin your pursuit of a more rewarding procurement
career get your Procurement Training & Certification Starter Kit now by signing up
for a free NLPA Basic Membership!
If you are already a member of the NLPA, click here to login
and visit the "Starter Kit" tab to access these resources.