A Guide to Choosing Your Kiosk Contract Manufacturer Wisely: Phase 4 - Evaluate and Compare Contract Manufacturers
We're back with the next installment of our series on choosing a contract manufacturer (CM) for your automated retail kiosk. In this post, Kinetic Retail Group (KRG) will guide you through the essential steps of objectively evaluating responses from potential CMs. We'll explore a recommended approach for quantifying the suitability of each CM, ensuring a fair comparison free from bias. By adopting a fair and logical methodology, you can instill confidence in the participating CMs, and encourage more CMs to join the process.
Develop or Select Evaluation Tool:
When conducting this analysis, it's vital to utilize an evaluation tool, such as a chart or matrix, to compare CM responses. This tool should encompass the key evaluation criteria defined in your Request for Proposal (RFP). Additionally, you should consider factors that may influence your decision, like location, culture, communication style, responsiveness, innovation, and alignment with your vision and values.
KRG has developed a proven decision methodology known as the 'Weighted Attribute Decision Matrix' (WADM) over the past few decades. This WADM methodology has established confidence in KRG within the CM community and has maximized CM participation in our administered RFPs. Here are the high-level steps of the methodology, illustrated with an example of applying WADM to the selection of new cars:
Identify the attributes: The first step is to identify the attributes or criteria that are most important to you when selecting a contract manufacturer (e.g. price, lead-time, customer service, flexibility, quality management program, engineering expertise, warranties, etc... ), which you should be able to extract from your RFP and analysis of CM candidates in the previous phases. We suggest selecting at least four, but no more than eight attributes. In the case of selecting a new car, those attributes could be:
Assign attribute weights: Once you have identified the attributes, the next step is to assign weights to each, based on how important it is to you, ensuring the sum of all weights is 100%. For instance, if price holds more significance in the car example, you could assign it a weight of 35%, while if styling is less important, you might assign it a weight of 15%.
Define the rating system: Determine how you will evaluate each attribute, by establishing a uniform evaluation scale (e.g., three-point or five-point, where smaller numbers indicate an unfavorable alternative and larger numbers indicate preferable) for all attributes. For each attribute, clearly define the characteristics of each point on the scale. For the car example, if fuel economy is important, and you’re using a three-point scale, a ‘1’ score could be MPG < 20, ‘2’ could be 20 ≤ MPG < 30, and ‘3’ would be MPG > 30. In this example, MPG is quantitative, which easily translates to the evaluation scale. It’s more challenging, but just as important to describe the characteristics for a qualitative attribute scale. E.g. if ‘Styling’ is an attribute for evaluating cars, then a ‘1’ score could be “uninspired or unappealing”, ‘2’ could be “ordinary or adequate”, and ‘3’ could be “sleek or iconic”.
Rate the alternatives: Evaluate every CM on each attribute by assigning a score on the uniform scale, reflecting how well the CM satisfies the attribute rating description. You have the flexibility to choose the evaluation approach that best aligns with your organizational goals and team dynamic. Consider having each team member conduct their own independent scoring evaluation of each CM. This approach provides valuable insights into the variance of perceptions among your team members, offering a diverse perspective. Alternatively, opt for a collaborative evaluation where the team assesses each alternative CM together. This method aims to foster consensus on the assignment of scores, encouraging team cohesion and shared understanding. There's also the possibility of utilizing a combination of both methods, tailoring the approach to fit the unique dynamics of your organization. Remember, the best method depends on your specific goals and how your team collaborates most effectively.
Calculate the scores: To determine the ultimate score for each CM, multiply the assigned score of each attribute by the corresponding weight to calculate the weighted score for that specific attribute. Afterward, sum the weighted attribute scores across all attributes. The cumulative result provides the comprehensive weighted score for the CM, offering a quantitative measure of their overall suitability. This meticulous calculation ensures that each aspect is considered in proportion to its importance, facilitating a nuanced evaluation of each CM's strengths and capabilities.
The output of this method will provide you with a ranked list of your CMs. Whether you use this approach or another objective evaluation method, you must arrive at a ranking of the CM proposals according to how well they match your expectations and requirements, which highlights the strengths and weaknesses of each candidate.
Narrow the Field
At this point, contemplate eliminating candidates that are clearly unfeasible or significantly lower in score than others. Make plans to contact the remaining CM’s references who can provide valuable insights into the CM’s style and performance capabilities from an unbiased perspective. By collecting information from multiple references for each CM, you gain a comprehensive understanding of their track record and reputation. When contacting references, request specific information about whether and how the CM met the customer's expectations. Inquire about both the positive aspects (pros) and any potential drawbacks (cons) of working with the CM. This feedback will aid in your decision-making process to narrow down to the top two or three.
Site Visit: Hands-on Due Diligence
While RFP responses and references offer insights, it's crucial to visit the facilities of leading CM candidates whenever possible. On-site visits allow firsthand inspection of equipment, processes, and quality control systems. Engage with the CM's team, ask relevant questions, and request to view sample products or prototypes. By observing their operations, you can assess their capabilities, efficiency, and adherence to industry standards. This in-person experience helps evaluate factors like commitment to quality, problem-solving approach, and their ability to meet your specific requirements.
Employing this method to assess responses from each CM serves as a vital tool for objective decision-making. It not only facilitates a thorough understanding of the landscape of available options but also plays a crucial role in pinpointing the most suitable CM for your project. KRG has guided many clients through this evaluation process, so contact us if you need assistance.
In our upcoming final segment of this series, we will delve into the intricacies of negotiating with the selected CM finalists. With the end of the selection process in sight, you're on the brink of embarking on the next significant phase: the actual manufacturing of your product. These are truly exciting times as your vision transforms into a tangible reality!
