Category: Supplier

Selecting suppliers using a grid analysis

Let’s say you need to find a manufacturer for a new product.  It’s easy to look at the cost and weigh heavily in that direction.  However, this often results in regrets later when shipment delays and other quality issues occur.

A useful quality tool for making such decisions is the Grid Analysis.  It allows you to effectively compare various options using factors that can be weighted to adjust for relevance.

Example: A 3rd party quality provider has provided systems audits relating to three options you are considering for manufacturing in China.  You’ve determined the most critical decision factors include:

  • Quality
  • Timeliness
  • Communications
  • Management
  • Cost

Who do you pick?:

All things equal…

GridAnalysis_NoWeights

Using weights…

GridAnalysis_Weights

It’s not always the lowest cost provider that proves to be the best choice!

Grid Analysis is the simplest form of Multiple Criteria Decision Analysis (MCDA), also known as Multiple Criteria Decision Aid or Multiple Criteria Decision Management (MCDM). Grid Analysis helps you to decide between several options, where you need to take many different factors into account.

To use the tool, lay out your options as rows on a table. Set up the columns to show the factors you need to consider. Score each choice for each factor using numbers from 0 (poor) to 5 (very good), and then allocate weights to show the importance of each of these factors.

Multiply each score by the weight of the factor, to show its contribution to the overall selection. Finally add up the total scores for each option. The highest scoring option will be the best option.  (www.mindtools.com)