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hello listeners and thank you for choosing to listen to this podcast today we're going to be doing an interview with a lady called sharon and we're going to be talking about supplier evaluation so firstly sharon thank you very much for sparing the time i know you're very busy and while we just sort of set the scene if you could just let the listeners know please a little bit about yourself and and your roles and your experience please yeah hi katie really really happy to be here today so my name's sharon i am the deputy director of procurement for um the local nhs area i've worked for them for just under a year now so it's mainly public sector work that i carry out prior to that i've got about 20 years experience of procurement in a variety of sectors so i've worked in healthcare pharmaceuticals automotive and done a variety of roles for both direct procurement and indirect procurement so hopefully today when we're talking about the subject i can give lots of um ideas from both public and private sector to help the listeners oh that sounds great so yeah certainly a wealth and breadth of experience there so i look forward to finding out what you're going to be sharing with us so just to get us going then what um i believe and feel free at any point to correct me if i'm wrong but i think most people in procurement and in business have an understanding that not all suppliers are a good match for all buying organizations and not necessarily all suppliers are able to provide all products but from your experience could you possibly tell the listeners what key areas you consider important when you evaluate a supplier to try and establish the best matches absolutely so when you are evaluating a supplier there are lots of considerations that you have to think about and also it's a really important point that these are going to vary depending on the purchase that you are making so as you know from a procurement perspective we purchase a wide variety of items so it could be capital equipment it could be services it could be direct items it could be mro spares it could be stationary depending on what it is you're buying is going to depend on whether you really need to do any kind of evaluating or whether those suppliers are going to be quite generic or whether you need to go into a lot of detail so a lot of the time you would probably use some kind of theory like the crowd get matrix to decide whether the spend is going to be very strategic therefore if you're spending a lot of money on it and it's a very critical supply to your business you're probably going to spend a lot more time evaluating to make sure that that supplier is going to fit your business if however on the credit matrix it's something that is kind of the bottom left corner it's repeat business it's quite standard it's quite low value and it's not really strategic you might spend a bit less time doing the evaluation so um things that are going to be considered you could also use your carter's tendencies to think about how you're going to evaluate but the things that generally in my career i i would think about financial stability is a really really big one so there's been lots of things in the press recently talking about when contracts have been put in place and the supplier has actually gone out of business i think the biggest one i can think of is carillion which affected massive amounts of companies up and down the uk so it's not just about checking those suppliers out financially when you first put the contract in place but it's also really important to keep checking that financial stability as that supplier has been one one of your suppliers for a period of time um depending on the procurement size or capacity of the supplier is also really important so if you've got a contract that you're thinking of placing for i don't know 20 million pounds and the supplier only turns over 2 million pounds a year it's obviously going to be a big stretch for them to be able to fulfill that contract so you've got to think about the size and the capacity of the supplier and thinking back to my automotive days but also my current health care days um quality is really really important and so is reputation so if you have a supplier that is able to provide a product you need to know that that product is going to be of a certain quality so in the healthcare sector for example they have to meet certain requirements and pass certain trials so we all know about the covert situation at the moment all the vaccines that are going through the trials once those have been evaluated and are deemed to be safe then they'll get licensed and then those are going to be available that have like widely in pharmaceutical products so there may be a kind of quality or a licensing requirement experience and knowledge as well so you want to know that if you're going to contract with a supplier that they're going to have the experience that you need after all you're going to be paying for this product or this service you need to know that they're going to be able to do it yeah the other thing that people sometimes forget about is the kind of ethical cultural and sustainability part of suppliers so sometimes you'll get the supplier that perhaps won't be as ethical as you would like them to be so if you work for an organization that has really high standards with sustainability with ethics and you're perhaps looking to work with a company whose um kind of cultural fit doesn't match that generally speaking that's never going to work because the two companies are not going to gel so there's lots of different considerations that you can think about when you're looking to evaluate the supplier and it really depends on the spend and what it is you're going to be buying and how long you want to put that contract in place for that's brilliant sharon really informative thank you very much so based on on all your years of experience within public and private sector do you think you could share with us one example of of an actual supply evaluation process and just talk us briefly through what you did and why you made the decisions you did please yes so i've chosen an example that actually comes from private sector okay um and it's the thing i did a number of years ago whilst i worked in the automotive industry and it was a really big tender looking at returnable packaging so in the organization i worked for it was a japanese automotive organization they worked on a just-in-time basis which meant all of the parts for the class that we made came to the factory literally just before it was needed to be put onto the car and the way that they used to do this was they survived to the suppliers the returnable packaging which had all the inserts in they would put the parts in that would get collected or sent to sites in that packaging and it used to sit by the line and people would take the parts out and put them on the vehicles the logistics team had decided that the current sizes of the returnable packaging we were using wasn't optimal for the size of the lorry and they had looked at this and decided that they could get 100 cross-stackability of boxes by tweaking the sizes of the packaging the problem was that would mean it wasn't a standard product on the market so we were looking to create if you like a whole new line of packaging with a whole new set of sizes that would fit standard lorries and be able to fill it 100 so we were not shipping fresh air the saving in logistics terms was huge it was upwards of 50 million pounds a year so that we weren't shipping fresh air so massive project so what did we do in terms of supplier evaluation well the first thing we did was put the project team together and get the specification and requirements so if you're talking about a big spend and a big project it's really really good to get a project team together so that you can really nail the specification and the requirements if you don't get that part right my experience tells me that you will struggle and you'll put a contract in place that will never work so that part's really really important yeah yeah in order to get the right suppliers onto the tender process we did huge amounts of market research from the procurement team we went to trade fairs we also did a pre-qualification questionnaire so because this project was so big we needed suppliers of a certain size certain turnover as i talked about earlier we needed them to have the right cultural fit the right sustainability because that was very big in the organization that i worked for at the time we needed them to have the quality we needed them to have the experience and the knowledge so we came up with a pre-qualification questionnaire i think we sent the tender out eventually to five different suppliers um things that we were looking at were capacity whole life costing so really interested in how we were able to design the packaging talking about different tooling would we actually be able to kind of set design for this and look at intellectual property rights so that we get royalties if they decided as a company to sell this to somebody else we'd then generate some income so there's a lot of different facets to this procurement and we're interested in their experience obviously their finance locations as well because we were looking at this for a whole of europe so we didn't just want a uk position we wanted to be able to send these boxes all over the continent and also innovation um so we we sent the tender out having done the specification with the team five companies bid for it we then did an evaluation so we formed an evaluation panel before we got the tenders back we sorted the weightings in advance with all the questions and the evaluation that we were going to carry out we documented the scores everybody had to evaluate separately first and document those scores and then we all came together as a team and we looked at all the averages then we shortlisted two companies we went and did site visits we carried out audits we held the negotiations and then ultimately we decided on one supplier that met all of those requirements um and to my knowledge they still supply kind of ten years later um in the organization and that packaging is still going and they've earned revenue from royalties because they've sold it to other companies as well amazing so that's testament really to the fact that a real stringent evaluation process really does pay dividends in the fact that the company is still gaining value sort of 10 years plus on since you actually conducted the initial activity absolutely and it does i know that's a huge amount of resource because the project team was made up of lots of different people from the organization but again going back to the credit matrix it was in that top right category it was a very strategic procurement it meant a lot to the business it hit lots of different areas so it was worth the time we spent on it absolutely and i'm going to put you on the spot a little bit now sharon and i appreciate that you've spoken about all the things that are important with evaluation but do you think there's any areas that are more important than others with regards to evaluation and if so why do you think that i think it very much depends on what it is you're buying and so you can imagine if you're buying a building for example so in the role that i'm doing at the moment it's public sector it's healthcare we have got huge amounts of capital programmes going on so the requirements that we have from the suppliers are very different at this point in time for what we're buying than they would be for something standard so at the moment it's all about capacity it's all about time scales it's all about resource and it's all about quality um and those are the things that are really key to us obviously we also need the supply to be financially stable and that's proving quite difficult in the current climate because a lot of companies are struggling however we're generally finding in the kind of building area that lots of companies are still quite busy they're financially stable they're able to keep going in all of the lockdowns so that isn't such a big issue for us um but again it really depends on what you're buying if you're buying stationery products you're not going to need such a big evaluation because so many different suppliers on the market you don't need to carry out that full evaluation process yeah that makes perfect sense thank you and finally one last question in your opinion based on your professional experience what one piece of advice could you give to the listeners of this podcast which you think will assist them with conducting effective supplier evaluation so my one piece of advice would be as a procurement team in conjunction with your stakeholders is to evaluate your evaluation process and really create templates so if you get your stakeholders from the different parts of the business to buy into this process and you kind of have a brainstorming session you can create standard operating procedures that you can hold as part of procurement and you can roll this out time and time again it can be a proven process and you can tweak it as you go along so if you carry out a procurement and you think do you know what actually we need to tweak something or we need to add something in then it can be a live document that changes but generally speaking if you have templates tenders you have your terms and conditions that you can put in there you can have different things that you can include so whole life costing if you're talking about capital equipment you can have a section that you can pop in there if it's relevant and basically hold those documents as part of procurement create them get them right revisit them regularly and they will provide an invaluable source of information for you on every tender that you carry out fantastic advice there sharon and certainly showing the the experience that you've built up over the years in that little nugget there so thank you very much indeed the other thing that i would also recommend is doing some kind of evaluator training for the panels so okay we often sit on evaluations and as procurement teams we're quite used to it however a lot of the time if you're running a project for a tender you might get somebody from the stakeholder department that you're working with that doesn't do this very often and generally they're not always that confident or they don't really know about how to do it so one thing that we've just been looking at introducing where i work currently in the nhs is procurement leading evaluation training for evaluation panel members because it's really important in the public sector that when you're evaluating tenders it's thoroughly documented and it can be scrutinized and you've recorded absolutely everything and i think that was a bit lacking before so it's something we've introduced and that's made a massive difference brilliant thank you very much excellent advice again really useful thank you and i'm sure the listeners will take a lot from that as well so i just want to say thank you very much for your time i know you're a very busy lady i know that you've taken time out of your schedule to do this for us and the knowledge team today so thank you very much indeed hopefully the listeners will find it as interesting as i have always enjoyed doing these and i learn a lot as well but sincere thanks sharon um for your time and for sharing your examples and your knowledge thank you very much indeed no problem it was a pleasure thanks katie