Dear Madam, Dear Sir,

Thank you very much for taking the time to participate in our survey. You may want to submit
your answers online. As an alternative, you may print out this survey and return it by mail or
fax to our address:

Dr. Wolfgang Ulaga
Visiting Associate Professor of Marketing
Department of Marketing
University of Notre Dame
Mendoza College of Business
Notre Dame, IN 46556-5646
Phone (574) 631-9997
Fax (574) 631-5255
E-mail: wulaga@nd.edu
If you wish to return our survey by mail or fax, please
 
EVALUATION OF POTENTIAL KEY SUPPLIERS
CONTEXT
Assume your company has decided to establish a Key Supplier Program and has asked you to evaluate 25 separate suppliers regarding their attractiveness for becoming a preferred strategic supplier of a key component for your company.

You would like to select those suppliers that possess a high potential for creating value in a collaborative long-term relationship with your firm. To assist you in your task, a highly reliable external consulting firm has collected data and evaluated each of the potential suppliers on eight separate value drivers. The information on each potential supplier is summarized in a one-page profile.

However, the summary report does not contain an overall evaluation of the attractiveness of each key supplier and the probability that you would recommend that the firm become a strategic supplier. That is your job!

Further, each firm characteristic is rated in general terms (low, moderately low, average, moderately high, high). You will have to consider what each of these mean to you.

INSTRUCTIONS
Select a key component of your choice for a product manufactured by your company. For example, if your company were a manufacturer of washing machines, you might want to select an electric motor as a key component.

Then briefly describe the supply situation for this component and your own background by answering the questions on the following page.

We finally would like to ask you to read the definitions of each supplier evaluation criteria (‘value drivers’) and the one-page description for each firm. Please record independently your overall evaluation of the attractiveness of each firm for becoming a supplier before examining the next firm’s summary report. Use the 7-point scales at the bottom of each summary report. Consider what is required to be an attractive supplier candidate when making your decisions. Do not spend a great deal of time on each decision, but do consider all the information. Please try to use the entire scale.

EXAMPLE OF OVERALL RATING SCALE
If you feel that a firm is particularly unattractive as a key supplier, place an «X» in the left most blank, as shown below:
If you feel that another firm was an especially attractive potential key supplier, place an «X» in the right most blank, as shown below:
Please read the following definitions of key supplier characteristics:
Product Quality: The extent to which the supplier’s product meets the customer’s specifications. Key aspects of product quality are performance, reliability, and consistency over time. Typical measures of product quality are ‘Returns’ or ‘Parts per Million’ (PPM).

Service Support: In addition to tangible products, a supplier provides a range of accompanying services. These services can be: services directly related to the product (i.e., warranty, spare parts, or product adaptations), appropriate customer information (i.e. providing the ‘right information’ at the ‘right time’), and outsourcing a number of tasks to the supplier (i.e., sub-assembly, design, or testing).

Delivery Performance: The capability to consistently meet delivery schedules (on-time delivery), to adjust to changes in delivery schedules (flexibility), and to consistently deliver the right parts (accuracy).

Time-to-Market: The supplier’s capability to reduce the customer’s cycle time and bring products to market at a faster pace. For example, a supplier can reduce time-to-market for a customer through accelerating design work, developing prototypes faster than competitors, and speeding up the product testing and validation process.

Supplier Know-How: Manufacturers benefit from a supplier’s expertise in several ways. First, the supplier’s knowledge of the supply market may provide an opportunity to present the customer with new sourcing solutions. Second, a thorough understanding of the customer’s operations creates an opportunity for the supplier to assist the customer in improving existing products - both in terms of functionality and costs. Third, a supplier may assist the customer in developing new products.

Personal Interaction: Though business relationships exist between firms, they are actually managed by individuals. Personal interaction in a manufacturer-supplier relationship may create value in different ways such as improved communication between both parties, more effective and efficient problem resolution, and a better understanding of each partner’s objectives in the relationship.

Price: Direct product costs, i.e. the actual price charged by the supplier for the main product sold.
A supplier’s product may be priced higher than the product of an average supplier (i.e. the company would obtain a ‘low’ score on this criterion from a customer perspective). Also, the supplier may align his prices with an average market price (score ‘same level as average supplier’). Finally, a supplier’s product may be priced lower than the product of an average supplier (i.e. the company would obtain a ‘high’ score on this criterion).

Process Costs: All costs associated with obtaining and using a product in the manufacturing process (excluding the actual price paid for the product). Process costs include acquisition costs (i.e. inventory costs, order-handling costs, and costs for incoming inspections) and operation costs (i.e. costs for using the product in the production process such as downtime costs or costs for tooling). A supplier may have higher process costs than an average supplier (i.e. the company would score ‘low’ from a customer perspective). A supplier may just be average (score ‘same level as average supplier’). Finally, a supplier may be very successful at keeping process costs lower than an average supplier (score ‘high’ from a customer perspective).