Paźdź 17 2013

How to Select Quality Vendor

contact: kris@themanagementsystems.com

The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start. Here are five steps to help you select the right vendor for your business. This guide will show you how to analyze your business requirements, search for prospective vendors, lead the team in selecting the winning vendor and provide you with insight on contract negotiations and avoiding negotiation mistakes.

1. Analyze the Business Requirements

Before you begin to gather data or perform interviews, assemble a team of people who have a vested interest in this particular vendor selection process. The first task that the vendor selection team needs accomplish is to define, in writing, the product, material or service that you are searching for a vendor. Next define the technical and business requirements. Also, define the vendor requirements. Finally, publish your document to the areas relevant to this vendor selection process and seek their input. Have the team analyze the comments and create a final document. In summary:

-Assemble an Evaluation Team

-Define the Product, Material or Service

-Define the Technical and Business Requirements

-Define the Vendor Requirements

-Publish a Requirements Document for Approval

2. Vendor Search

Now that you have agreement on the business and vendor requirements, the team now must start to search for possible vendors that will be able to deliver the material, product or service. The larger the scope of the vendor selection process the more vendors you should put on the table. Of course, not all vendors will meet your minimum requirements and the team will have to decide which vendors you will seek more information from. Next write a Request for Information (RFI) and send it to the selected vendors. Finally, evaluate their responses and select a small number of vendors that will make the „Short List” and move on to the next round. In summary:

-Compile a List of Possible Vendors

-Select Vendors to Request More Information From

-Write a Request for Information (RFI)

-Evaluate Responses and Create a „Short List” of Vendors

3. Request for Proposal (RFP) and Request for Quotation (RFQ)

The business requirements are defined and you have a short list of vendors that you want to evaluate. It is now time to write a Request for Proposal or Request for Quotation. Which ever format you decide, your RFP or RFQ should contain the following sections:

-Submission Details

-Introduction and Executive Summary

-Business Overview & Background

-Detailed Specifications

-Assumptions & Constraints

-Terms and Conditions

-Selection Criteria

4. Proposal Evaluation and Vendor Selection

The main objective of this phase is to minimize human emotion and political positioning in order to arrive at a decision that is in the best interest of the company. Be thorough in your investigation, seek input from all stakeholders and use the following methodology to lead the team to a unified vendor selection decision:

Preliminary Review of All Vendor Proposals

Record Business Requirements and Vendor Requirements

Assign Importance Value for Each Requirement

Assign a Performance Value for Each Requirement

Calculate a Total Performance Score

Select a the Winning Vendor

5. Contract Negotiation Strategies

The final stage in the vendor selection process is developing a contract negotiation strategy. Remember, you want to „partner” with your vendor and not „take them to the cleaners.” Review your objectives for your contract negotiation and plan for the negotiations be covering the following items:

-List Rank Your Priorities Along With Alternatives

-Know the Difference Between What You Need and What You Want

-Know Your Bottom Line So You Know When to Walk Away

-Define Any Time Constraints and Benchmarks

-Assess Potential Liabilities and Risks

-Confidentiality, non-compete, dispute resolution, changes in requirements

-Do the Same for Your Vendor (i.e. Walk a Mile in Their Shoes)

6. Contract Negotiation Mistakes

The smallest mistake can kill an otherwise productive contract negotiation process. Avoid these ten contract negotiation mistakes and avoid jeopardizing an otherwise productive contract negotiation process.

http://operationstech.about.com/od/vendorselection/a/VendorSelectionHub.htm

Paźdź 11 2013

Conducting Audits: Science or Art:

contact: kris@themanagementsystems.com

Conducting Audits can be a Science but Meaningful Audits is an Art:

Identifying missing elements and obvious noncompliance/nonconformances is easy,
Identifying what is good and/or done right is necessary but difficult,
Identifying nonconformances to the intent of the standards or ineffective processes and activities is difficult in a working environment,
Separating the trivial (observations and findings) from the Important takes judgement and experience,
Lecturing about audit conduct and policy is easy,
Asking the right questions is harder,
Getting people to talk and listening to what they have to say can be difficult,
Establishing credibility (audit has value) is an art, it must be earned,
Maintaining control of the audit without turning off communications takes leadership,
Separating fact from fancy takes experience; reliance on objective evidence,
Making recommendations to resolve findings & observations is not good audit practice: – Lack of familiarity with the process and practice – Lose objectivity and become part of the problem,
Making suggestions that would stimulate resolution is recommended, where necessary.

Paźdź 7 2013

Choosing Vendors

contact: kris@themanagementsystems.com

Your vendors have as much interest in your company’s success as you do.

When you make a lot of sales, they make a lot of sales; when you get paid, they get paid. Having reliable and trustworthy vendors can help your business succeed, just as dealing with unreliable or shady firms can cause major setbacks.

Start by asking around; other business owners in your area can be a great source of information. Once you’ve got a list of names, call your local Better Business Bureau to find out whether any complaints have been filed against any of the vendors on your list. You can visit vendor Web sites and even tour their physical locations. You can ask for customer testimonials and for product samples as well. The key is to get as much information as possible before you make a large monetary commitment to a vendor you don’t know.

As you begin to choose vendors, particularly those who will stock your inventory, try to think of them as business partners. You want to choose the ones with whom your company can develop a long-term, mutually profitable relationship, and that relationship starts with your first request for a price quote. Don’t be afraid to ask vendors for quotes; they’re used to it and they probably expect it. After all, this is a major purchase, and it’s never wise to make a major purchase without shopping around — especially when you’re going to a vendor you’ve never dealt with before.

When you’re dealing with a new business and new vendors, make sure to get price quotes from at least two sources for any purchase over $150. If your order will be a lot more than that, consider getting at least three different quotes; more is even better.
If you’re having a hard time finding vendors, and an even harder time finding information about them, you can run your own test by placing a very small order, under $100 in total value. If that process goes well, take it up a notch and place a slightly larger order the next time. Once you feel comfortable with the vendor, you can place your full-blown orders without worry.

Getting Quotes

When you want to make a big purchase for your business, you need to know the total cost upfront. To get that information, you need to ask the people who sell whatever it is you want to buy. In order for that information to be fixed (as opposed to changeable), it’s best to get it in writing. When your company is buying a product, that information will come in the form of a quote; when it’s services you’re after, the quote is usually referred to as an estimate.

The best way to get a quote is to talk with a salesperson; quote requests that come by mail are often ignored. Phone contact is fine, especially after you’ve begun to build a relationship with that vendor or salesman. For your first time out, though, a face-to-face meeting could prove more fruitful, especially if you’re spending a significant sum. Even though salesmen themselves are seldom involved in setting company pricing policy, they often have some leeway when it comes to closing a deal. When you establish a personal connection with a salesman, he’ll work harder with you and for you; after all, making a sale to you is his bread and butter. Flexible areas often include lower unit pricing when you buy in bulk, and better credit terms.

Hitting it off with the salesman is a great start toward developing a good relationship with a vendor. However, don’t stop after getting a single quote just because you like the first salesman you meet with. Another vendor may offer better pricing, better terms, better merchandise, and maybe a salesman that you’ll like even better.

Avoid These Vendors

There are some vendors that you should avoid. If you run across a vendor with one (or more) of the following characteristics, run in another direction:

Accepts cash only

Asks for checks made out to cash

Won’t send a brochure or catalog

Won’t give you a price quote or estimate in writing

Dirty, disorganized stockroom

No warehouse or storage facility

If one (or more) of these factors is the norm in your industry, and the vendor in question has gotten high marks from a reliable source, it’s probably safe to keep him on your list. However, if it’s the vendor telling you this is normal practice, and you can’t verify that with anyone else, look for a different vendor.

http://www.netplaces.com/accounting/controlling-purchase-costs/choose-your-vendors-wisely.htm

Paźdź 4 2013

Vendor Management Success Tips

Strategies to Strengthen Vendor Relations
Vendor management allows you to build a relationship with your suppliers and service providers that will strengthen both businesses. Vendor management is not negotiating the lowest price possible. Vendor management is constantly working with your vendors to come to agreements that will mutually benefit both companies.
1. Share Information and Priorities
The most important success factor of vendor management is to share information and priorities with your vendors. That does not mean that you throw open the accounting books and give them user IDs and passwords to your systems. Appropriate vendor management practices provide only the necessary information at the right time that will allow a vendor to better service your needs. This may include limited forecast information, new product launches, changes in design and expansion or relocation changes, just to name a few.

2. Balance Commitment and Competition
One of the goals in vendor management is to gain the commitment of your vendors to assist and support the operations of your business. On-the-other-hand, the vendor is expecting a certain level of commitment from you. This does not mean that you should blindly accept the prices they provide. Always get competitive bids.3. Allow Key Vendors to Help You Strategize
If a vendor supplies a key part or service to your operation, invite that vendor to strategic meetings that involve the product they work with. Remember, you brought in the vendor because they could make the product or service better and/or cheaper than you could. They are the experts in that area and you can tap into that expertise in order to give you a competitive advantage.

4. Build Partnerships For The Long Term
Vendor management seeks long term relationships over short term gains and marginal cost savings. Constantly changing vendors in order to save a penny here or there will cost more money in the long run and will impact quality. Other benefits of a long term relationship include trust, preferential treatment and access to insider or expert knowledge.

5. Seek to Understand Your Vendor’s Business Too
Remember, your vendor is in business to make money too. If you are constantly leaning on them to cut costs, either quality will suffer or they will go out of business. Part of vendor management is to contribute knowledge or resources that may help the vendor better serve you. Asking questions of your vendors will help you understand their side of the business and build a better relationship between the two of you.

6. Negotiate to a Win-Win Agreement
Good vendor management dictates that negotiations are completed in good faith. Look for negotiation points that can help both sides accomplish their goals. A strong-arm negotiation tactic will only work for so long before one party walks away from the deal.

7. Come Together on Value
Vendor management is more than getting the lowest price. Most often the lowest price also brings the lowest quality. Vendor management will focus quality for the money that is paid. In other words: value! You should be willing to pay more in order to receive better quality. If the vendor is serious about the quality they deliver, they won’t have a problem specifying the quality details in the contract.
8. Vendor Management Best Practices
Whether you’re a multimillion dollar company or a small business with a few employees, here are some Vendor Management Best Practices that any size business can use:

Vendor Management Best Practices: Vendor Selection

The vendor management process begins by selecting the right vendor for the right reasons. The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start. You will need to analyze your business requirements, search for prospective vendors, lead the team in selecting the winning vendor and successfully negotiate a contract while avoiding contract negotiation mistakes.

Vendor Management Best Practices: Scrutinize the Prospects

Once you start to look at individual vendors, be careful that you don’t get blinded by the „glitz and sizzle.” Depending upon the size of the possible contract, they will pull out all the stops in order to get your business. This may include a barrage of overzealous salespeople and „consultants”. Just because they send a lot of people in the beginning, doesn’t mean they will be there after the contract is signed.

As you begin your vendor search, ask some questions that will help you eliminate the more obvious misfits. For example, Is the proposed material, service or outsourcing project within the vendor’s area of expertise?

Vendor Management Best Practices: Remain Flexible

Be wary of restrictive or exclusive relationships. For example, limitations with other vendors or with future customers. In addition, contracts that have severe penalties for seemingly small incidents should be avoided. If the vendor asks for an extremely long term contract, you should ask for a shorter term with a renewal option.

On the other hand, you should be open to the vendor’s requests also. If an issue is small and insignificant to you but the vendor insists on adding it to the contract you may choose to bend in this situation. This shows good faith on your part and your willingness to work towards a contract that is mutually beneficial to both parties.

Vendor Management Best Practices: Monitor Performance

Once the relationship with the vendor has begun, don’t assume that everything will go according to plan and executed exactly as specified in the contract. The vendor’s performance must be monitored constantly in the beginning. This should include the requirements that are most critical to your business. For example: shipping times, quality of service performed, order completion, call answer time, etc.

Vendor Management Best Practices: Communicate Constantly

The bottom line in vendor management best practices is: communication, communication, communication! Don’t assume that the vendor intimately knows your business or can read your mind. A well established and well maintained line of communication will avoid misunderstandings and proactively address issues before they become problems.

Wrz 20 2013

Quality Is All About Leadership – Video Story

ASQ member talks about how quality in the service industry is still a new and developing concept, and how proper management must be in place to make company-wide improvements:

Open below link to see video:

http://www4.asq.org/qualityforlife/work-stories/quality-is-all-about-leadership—video-story.html

Czer 27 2013

Is Your Management Style Effective?

Is Your Management Style Effective?
When it comes to management, half the battle is knowing when to use the right management style. Some styles tend to focus on people, while others gravitate toward a specific project or product. The management style that ends up working in a particular situation depends on your people skills, knowledge, resources available to you, and the results you’d like to achieve.
It’s important to choose the right management style for each situation. Without styles that align with certain circumstances, you may find your business moving more slowly and making costly mistakes.

Maj 29 2013

Communication Management Skills

Communication Management Skills:

A few tricks to improving your communication skills are:

Practice active listening. Try to look the person speaking in the eyes and think only about the words that they are speaking.
Speak slowly and ask questions to test whether the listening party understands what is being communicated.
When writing, always write a first draft and edit the draft into a final copy after asking whether the purpose of your communication is clear and understandable.
When you find yourself caught up in your own thoughts, try to relax and “Watch” the thinker thinking those thoughts. You are not your thoughts. You are greater than your thinking.

Maj 26 2013

Approaches to Success Strategy:

In a for-profit company, for which competition and profitability are important, your goals will differ from those of a nonprofit or government department. Likewise, objectives for a department or team will have a different scope from objectives for your organization as a whole.
For example, and depending on scope and circumstances, you may want to develop strategies to:
Increase profitability.
Gain more market share.
Increase approval ratings, or boost customer satisfaction.
Complete a project under budget.
To determine your strategy, you must understand fully the internal and external environmental factors that affect you. With that understanding, you can identify your clear advantages and use these to be successful. From there, you can make informed choices and implement your strategy effectively.
So, strategy creation follows a three-stage process:
Analyzing the context in which you’re operating.
Identifying strategic options.
Evaluating and selecting the best options.
We’ll look at this process, and review some useful tools that can help you develop your strategy.
Stage 1: Analyzing Your Context and Environment
In this first stage, you ensure that you fully understand yourself and your environment. Do the following:
Analyze your organization
Firstly, examine your resources, liabilities, capabilities, strengths, and weaknesses. A SWOT Analysis is a great tool for uncovering what you do well and where you have weaknesses, providing that you use it rigorously. It’s much easier to achieve your objectives when your strategy uses your strengths without exposing your weaknesses.
Also, look at your Core Competencies. These highlight your unique strengths, and help you think about how you can set yourself apart from your competitors.
Analyze your environment
Now you need to examine your current operating environment to predict where things are moving. Are there exciting opportunities that you should pursue? What future scenarios are likely in your industry, and how will these impact the work that you do?
PEST Analysis, Porter’s Diamond, and Porter’s Five Forces are great starting points for analyzing your environment. They show where you have a strong position within the larger environment, and where you may have issues.
As you prepare to create your strategy, make sure that you’re working in a way that’s aligned with changes in your operating environment, rather than working against them. These external factors are often beyond your control, so if you pursue a strategy that requires a change in one of these elements, you may have a long, exhausting, unprofitable battle ahead of you.

Tip:
A TOWS matrix can help you with your internal and external analysis. This framework combines everything you learned in your SWOT Analysis (TOWS is SWOT in reverse), and then applies it to developing a strategy that either maximizes strengths and opportunities, or minimizes weaknesses and threats.

Analyze your customers and stakeholders
Your strategy defines how you’ll win, and winning is typically framed by how well you satisfy your customers. For-profit companies must keep their customers and shareholders happy. Governments, nonprofits, and project teams all have other stakeholders to satisfy as well. Strategy creation must consider these needs.
Identify your clients and stakeholders. What do your clients want? And who are the key stakeholders in your success? A Stakeholder Analysis will help you uncover these needs and preferences.
Also, look at your market in detail. Answer key questions such as „How is our market segmented?”, „What subpopulations can we reach cost-effectively?” and „What is our optimal Marketing Mix?”
Analyze your competitors
In a traditional for-profit company, you must understand how your products compare with competitors’ products, and what your competitors’ competencies are. How easy, or difficult, is it to enter your market? What alternatives do customers have?
Our article on USP Analysis helps you identify ways in which you can compete effectively. You’ll also find many useful tools that can help you understand competitors in our article on Competitive Intelligence .
Non-profits, departmental teams and projects have competitors too. Other projects and teams within the department compete for money and other resources. Therefore, you must prove that you can add value, meet objectives, and contribute to organizational success.
Stage 2: Identifying Strategic Options
In Stage 1, you developed an understanding of how your organization or team fits within the context of the internal and external environments. Now it’s time to think about the different things that you could do to create a clear advantage, and meet your objectives. Here are some fundamental activities that can help you make this decision.
Brainstorm options
Use creativity tools like Brainstorming, Reverse Brainstorming and Starbursting to explore projects that you could run to develop competitive advantage. Guide your brainstorming with reference to the organization’s mission statement, but, depending on your role in the organization, consider how far you should be constrained by this.
Examine opportunities and threats
Your SWOT Analysis identified some of the main opportunities and threats you face. Using this as a starting point, brainstorm additional ways to maximize your opportunities, minimize your threats, or perhaps even turn your threats into opportunities.
Solve problems
A problem-solving approach can also help at this stage. If your problem is that you’re not achieving your goals, ask yourself how you can ensure that you do. (If everyone in your industry finds it hard to deal with a particular problem, then you may gain a competitive edge by dealing with it.)
For example, if you want to increase your customer satisfaction ratings in an industry plagued by poor customer relations, your starting position is „low satisfaction.” Brainstorm why this is the case, and create strategic options that would increase satisfaction. Tools like Root Cause Analysis, the 5 Whys, and Appreciative Inquiry can give you some interesting new perspectives on these problems.
Stage 3: Evaluating and Selecting Strategic Options
The final stage is to evaluate strategic options in detail, and select the ones that you want to pursue.
Evaluate options
By this stage, you’ve probably identified a range of good projects that you could run. You must now evaluate these to choose the best strategic options. Consider every option you’ve identified, but don’t make a final judgment until you’ve completed your assessment.
Start by evaluating each option in the light of the contextual factors you identified in Stage 1. What do these tell you about each option?
Techniques like Risk Analysis, Failure Modes and Effects Analysis and Impact Analysis can help you spot the possible negative consequences of each option, which can be very easy to miss. Make sure that you explore these thoroughly.
Many options will be analyzed on a financial basis. Here, techniques like Cost-Benefit Analysis, Break-Even Analysis , use of Net Present Values (NPVs) and Internal Rates of Return (IRRs), and Decision Trees are helpful.
Grid Analysis is particularly helpful for bringing together financial and non-financial decision criteria. It helps you weight individual decision criteria, and consider subjective features – like team fit and the likelihood of team buy-in – as well as objective, tangible factors like cost and return on investment.
Choose the best way forward
With your evaluation complete, you now must choose the best strategic option or strategic options, making sure that you don’t choose so many options that you spread your resources too thinly.
Check your ideas for consistency with your organization’s Vision, Mission and Values, and update these if necessary. It’s easy to forget about these critical elements during strategic planning, so ensure that what you want to „win” is something that contributes towards the organization’s overall purpose.
Check your assumptions using the Ladder of Inference . This helps you confirm the soundness of the reasoning process used to develop your strategy.

Tip:
There’s a lot of debate and disagreement about the best way of developing a strategy. Don’t be afraid to adapt this approach to your own, specific circumstances!

Implementing Strategy
It’s no good developing a strategy if you don’t implement it successfully, and this is where many people go astray.
See our articles on VMOST Analysis and the Balanced Scorecard for ways of bridging the gap between strategy development and implementation, and our Project Management section for the techniques you’ll need to use to implement strategy successfully.

Key Points
Your strategy tells you how you’ll achieve success, no matter how that success is defined. And whether you’re developing a strategy at the personal, team or organizational level, the process is as important as the outcome.
Identify your unique capabilities, and understand how to use these to your advantage while minimizing threats. The process and tools identified above will help you identify a variety of potential strategies for success, so that you can ultimately choose the one that’s right for you.

http://www.mindtools.com/pages/article/developing-strategy.htm

Maj 26 2013

Six tips for improving your client relationships.

1. Be glad your client doesn’t know everything

There’s a famous quote, „The greater part of our happiness or misery depends upon our dispositions, and not upon our circumstances.” When dealing with clients you might consider clueless, you can be frustrated by their lack of knowledge or you can appreciate the fact that if your clients knew more, you might not have nearly as much work.

2. Communicate clearly, communicate often

Clients often complain about poor communication, and while some clients desire more communication because they’re uncomfortable or anxious, the reality is that service providers frequently do drop the ball in keeping clients informed.

While communication is a nuanced subject and each client relationship is different, erring on the side of overcommunicating is usually better than erring on the side of undercommunicating. Remember: client experience matters. The most successful service providers aren’t just delivering top-notch work product, they’re delivering a superb client experience — something that typically requires clear, consistent communication.

3. Be clear about what you need

The old adage „A closed mouth doesn’t get fed” is particularly relevant when it comes to managing clients. Not sure about scope and need a more detailed specification, for instance? Don’t be shy or lazy: ask for it!

Unfortunately, many service providers shoot themselves in the foot by not asking for what they need up front and instead scrambling every time they need something they don’t have, an obviously more stressful approach that can sour perception of the relationship.

4. Establish up front what you do and don’t do

While clients may dream of finding jack-of-all-trades service providers who can handle all of their needs, chances are you don’t do everything. Some nightmare clients are nightmare clients because they don’t quite understand this.

The distinction between a web designer and a web developer, for instance, may be obvious if you’re a designer or developer, but it may not be to your clients. Because of this, it’s important to establish up front what is it you do and don’t do, and maintain boundaries as necessary to prevent the type of role creep that can be the cause of much frustration.

5. Balance money with sanity

In some, your worst clients may also be your best clients. Example: one of your clients might be a big company that’s disorganized, hard to communicate with and expects you to fill in the blanks, but pays well and doesn’t mind paying more to have you „deal with it.”

If you don’t feel that the money, however, adequately compensates for the lack of organization, poor communication and „you figure it out” approach, you’ll need to consider whether you can really afford to maintain the relationship without a change in the rules of engagement.

6. Don’t be afraid to break up

Why are stories of nightmare clients so common? One reason is that when push comes to shove, many service providers, despite their angst, are unwilling to turn their nightmare clients into nightmare former clients.

Maj 24 2013

Business Problem Solving

Business Problem Solving:
When you’re solving business problems, it’s all-too-easy easy to skip over important steps in the problem-solving process, meaning that you can miss good solutions, or, worse still, fail to identify the problem correctly in the first place.
One way to prevent this happening is by using the Simplex Process. This powerful step-by-step tool helps you identify and solve problems creatively and effectively. It guides you through each stage of the problem-solving process, from finding the problem to implementing a solution. This helps you ensure that your solutions are creative, robust and well considered.
We’ll now look at each step:
1. Problem Finding
2. Fact-Finding
3. Problem Definition
4. Idea Finding
5. Selection and Evaluation
6. Planning
7. Sell Idea
8. Action

Source Management

Quality Assurance & Control Services, ISO 9001, AS9100, ISO13485, Auditing, Inspections : Tel. (201) 701-0879

How to Select Quality Vendor