You're listening to Business English Pod, the Business English podcast for professionals on the move.
Hello, and welcome back to Business English Pod.
My name's Edwin and I'll be your host for today's lesson on English for purchasing and discussing product requirements.
For purchasing managers, choosing the right vendor can be like choosing a business partner.
After all, your company's reputation is tied directly to the performance of your vendors.
People judge you by the goods you use to run your business or build your products.
If something goes wrong, your customers blame you, not your vendors.
But what makes the right vendor?
Well, that discussion begins with your needs.
If you're in manufacturing or product development, you'll be talking about design requirements.
These design requirements or product specifications are going to help you determine whether a vendor can do the job.
And the engineers or merchandisers in the room are going to have some strict technical requirements.
Once you have a sense of what you need, then you can discuss vendor criteria and qualifications.
And because purchasing relationships are ongoing, you may also want to establish performance indicators to ensure everything goes well once you've selected a vendor.
In today's dialogue, we'll hear a meeting in a company called XFit, which makes fitness equipment.
Adam is a purchasing manager in Asia who has been looking for a new manufacturer of an important component.
He's on the phone with Crystal, another manager, who is leading the meeting. and Jason, an engineer.
The team is talking about the product requirements and vendor criteria.
As you listen to the dialogue, try to answer the following questions.
1.
What does Jason emphasize as a must in terms of design requirements?
2.
What does Crystal say is the most important criteria for evaluating potential vendors?
3.
What other criteria does Adam want to discuss?
Alright, let's get going.
Adam, are you with us?
Good connection?
Yes, all good.
Great.
So a few things to cover.
Maybe we can start with the design requirements, then dig into the selection criteria.
Sound good?
For sure.
And on the design side of things, you've got Jason there, right?
Yeah.
Hi, Adam.
So, one super important thing to mention here is size.
I mean, we're starting with the bigger pulleys on the T-90 unit. one quarter inch cable on that.
But we ultimately want them making the T-50s as well.
And that's three sixteenths.
Okay, great point.
That's definitely something we need to keep in mind.
This is in the product specs you sent over, right?
Yes.
For today though, just want to run through the important stuff.
That size issue is a biggie.
And also, it has to be hardened steel.
And I've got notes here in the performance specs about tolerances and standards.
Make sure you communicate these.
Some might try to downplay that, but hardened steel to those standards, that's a must.
Yeah, totally on board with that.
I know how critical this stuff is for reliability.
And yeah, there was one other thing I wanted to check with you...
Okay, yeah, here we go.
Do we need to specify hardened steel on the whole casing or just for the pulley?
Okay, got that.
So can we talk a bit about what we're actually looking for in a company?
Yeah, I've got a rough sense, but I agree.
We need to lay this out clearly.
Okay.
Exactly.
Number one is quality.
A verifiable track record.
Top-notch quality control.
These are non-negotiable.
Absolutely.
Need to do our due diligence there.
And part of that due diligence is looking at capacity and finances, especially if you're going with single supplier on this one.
Okay, well, maybe we could think about setting a minimum turnover for suppliers.
I mean, could we establish a threshold of like, say, $3 million in annual revenues?
Yes, that's a possibility.
But I'll need to run it by Paula first, and she's not back until next week.
Okay, then.
So, can we look at another criteria here?
Delivery.
We need to figure out how we're going to assess that one.
Right.
I'd really like to get the on-time delivery history from shortlisted suppliers.
We're going to be tracking that pretty closely going forward.
Yeah, I think we can swing that.
And also on the delivery side, I've been asking about turnaround time.
Lots of variables on that, but it'll be interesting to see what they have to say about it.
Now let's go through the dialogue again and look at the language and techniques the team used to discuss the design requirements or specifications and vendor criteria.
All right, let's get going.
Adam, are you with us?
Good connection?
Yes, all good.
Great.
So a few things to cover.
Maybe we can start with the design requirements, then dig into the selection criteria.
Sound good?
For sure.
And on the design side of things, you've got Jason there, right?
Communication between purchasers and engineers in this type of situation is very important.
Adam is out talking to potential suppliers and he has to know exactly what they are required to supply.
That's why Adam asked Jason, the engineer, to explain the design requirements or product specifications.
He needs to be absolutely clear about these requirements.
What are some other ways we can clarify design requirements?
Let's run through a few more examples.
The holes are supposed to be 38 millimeters diameter.
Is that right?
So the handles should be hardwood, preferably oak or cherry?
Should these be wired for 110 or 220 volts?
Can you explain what type of glue can be used on this?
As we can hear, Jason has some important information to convey about the design requirements.
Yeah.
Hi, Adam.
So, one super important thing to mention here is size.
I mean, we're starting with the bigger pulleys on the T90 unit.
One quarter inch cable on that.
But we ultimately want them making the T50s as well.
And that's three sixteenths.
Okay, great point.
That's definitely something we need to keep in mind.
As Jason explains, they're looking for a vendor to start with one particular component.
But ultimately, or in the future, they want someone to make other sizes as well.
This is definitely the kind of information that Adam has to keep in mind or consider when he's out looking for suppliers.
Let's hear what other technical information Jason has to explain.
This is in the product specs you sent over, right?
Yes.
For today, though, just want to run through the important stuff.
That size issue is a biggie.
And also, it has to be hardened steel.
And I've got notes here in the performance specs about tolerances and standards.
Make sure you communicate these.
Some might try to downplay that, but hardened steel to those standards, that's a must.
All of the important information about the parts they need manufactured is, of course, in the product specs, which is a document outlining all the technical specifications.
Adam can read that document himself, but it's important for Jason to identify key information.
In emphasizing technical priorities, he mentions that size is a biggie or very important.
But he also discusses materials and the importance of hardened steel.
Jason identifies this as a must.
In other words, it's absolutely necessary.
And when Adam is discussing technical matters with potential vendors, he needs to emphasize this.
Let's practice some more ways of identifying technical musts in purchasing meetings.
Durability is key, so the casing absolutely has to be powder coated.
The rubber seal is essential.
We can't settle for plastic on that part.
We'll need to make sure this piece is tempered glass.
It's critical the paint is non-toxic.
Now let's hear Adam respond to Jason's comments.
Yeah, totally on board with that.
I know how critical this stuff is for reliability.
And yeah, there was one other thing I wanted to check with you.
Okay, yeah, here we go.
Do we need to specify hardened steel on the whole casing or just for the pulley?
Part of the reason XFIT is changing vendors for this particular part is because they want to improve reliability.
So this overall business priority has to be understood throughout the company, not only with the engineers, but with the purchases as well.
Adam has asked about some of the technical requirements.
And now, we're going to jump ahead in the conversation and hear the team talk about vendors.
Okay, got that.
So, can we talk a bit about what we're actually looking for in a company?
Yeah, I've got a rough sense, but I agree.
We need to lay this out clearly.
Exactly.
Number one is quality.
A verifiable track record.
Top-notch quality control.
These are non-negotiable.
When you're making purchasing decisions, you definitely need more than a rough sense or general idea of what you're looking for.
You need to decide on clear criteria.
That is, what are the specific points you're looking for in a vendor?
Is your decision based on cost, or location, or delivery times?
Or maybe, as Crystal says, you're looking for quality.
We've already heard in the technical discussion that reliability is important.
So clearly, quality is one of their selection criteria.
In fact, it's non-negotiable, which is like saying that it is a must.
Let's try some more ways of establishing selection criteria when discussing potential vendors.
Location is definitely an important issue here.
We need to look carefully at whether they can produce the amount we need.
Ideally this would be a German or Dutch supplier.
Given our budget, price is our top concern on this.
Now let's get back to the dialogue as the team talks about other criteria in selecting a vendor.
Absolutely.
Need to do our due diligence there.
And part of that due diligence is looking at capacity and finances, especially if you're going with single supplier on this one.
Adam and Jason are talking about doing due diligence.
This means doing the research and investigation necessary to avoid risk.
When you are considering a person for a job, for example, you should call their references as part of your due diligence.
In this case, they are talking about investigating potential vendors' capacity and finances.
But when it comes to criteria like this, we need to talk a bit more specifically about qualifications.
Let's listen.
Okay, well, maybe we could think about setting a minimum turnover for suppliers.
I mean, could we establish a threshold of like, say, $3 million in annual revenues?
As you can hear, Adam wants to set a threshold of annual revenues for potential vendors.
Basically, he wants to say that companies with revenues of less than $3 million don't qualify.
This is a more specific and concrete way of discussing criteria.
Rather than just saying size is important, Adam is identifying how they can determine size.
How else can we set supplier qualification requirements as part of our due diligence?
Let's practice a few more examples.
We'll need to see quality control records for the past two years.
I think we should make sure they have a good track record in health and safety.
It's important that the company comply with all environmental regulations.
We're looking for a supplier with a healthy balance sheet and low debt.
If you listened to our last lesson, you'll know that one important issue for Adams Company is delivery from the manufacturer's factory to the US.
Let's listen as the team discusses the issue in greater detail.
Yes, that's a possibility.
But I'll need to run it by Paula first, and she's not back until next week.
Okay, then.
So, can we look at another criteria here?
Delivery.
We need to figure out how we're going to assess that one.
Right.
I'd really like to get the on-time delivery history from shortlisted suppliers.
We're going to be tracking that pretty closely going forward.
When you discuss vendor criteria, you'll also be talking about how you can evaluate your chosen vendor in the future.
Companies regularly track or monitor how their vendors are performing.
When Adam brings up the issue of delivery, Crystal is very clear about wanting good information about on-time delivery history.
That is, she wants potential suppliers to provide documentation that shows how frequently they meet their delivery deadlines.
This is important information because on-time delivery is going to be one of the performance indicators by which they assess the vendor.
Just as we have performance indicators and KPIs for individuals and departments, we have indicators for vendors and suppliers.
Let's try some more ways of establishing performance indicators for suppliers.
I'd like to see strength testing done regularly.
I think we should definitely monitor the number of parts rejected per order.
We will have to assess delivery time on every order.
Before we wrap up, let's hear Adam's final comment on the delivery issue.
Yeah, I think we can swing that.
And also, on the delivery side, I've been asking about turnaround time.
Lots of variables on that, but it'll be interesting to see what they have to say about it.
As we've heard, vendor selection is a complex and high-stakes issue.
We've heard the team discuss some of the technical requirements which they will need to communicate to potential suppliers.
We've also heard them discuss how they're going to select the right supplier.
Now let's practice some of the language we learned in today's lesson.
Imagine you work as a purchasing manager for a company that sells bottles.
You're in a meeting discussing technical requirements and vendor criteria.
You'll hear a cue from another purchasing manager.
Then I'll give you a suggestion for what you can say in response.
We'll guide you through each step in the practice and provide an example answer for each response.
Ready?
Let's give it a go.
Let's begin with the basic design requirements for these new bottles.
Start by stating that you will need both a 500ml and a 1L bottle.
Answer.
Well, we'll need both a 500ml and a 1L bottle.
Right, so we'll have to make sure they're set up for that.
Now, mention that it's essential that they are made of 50% recycled plastic.
Answer.
Yes, and it's essential that they're made from 50% recycled plastic.
Yes, that's important.
We can't compromise on our environmental goals.
Next, say this also means the supplier should be located within 500 miles.
This also means that the supplier should be located within 500 miles.
Right.
We can't have these bottles coming from overseas.
Now say that you'd like to make sure the supplier is ISO 9001 certified.
Answer.
And I'd also like to make sure the supplier is ISO 9001 certified.
Okay, I think we're all in agreement there.
Now how about performance indicators?
Finally, say that one thing you think you should be assessing is pollution controls.
Well, I think one thing we should be assessing is pollution controls.
Now let's practice some of the vocabulary we've covered in this lesson.
In a moment, you'll hear a series of sentences with a word replaced with a beep.
Repeat each sentence, including the missing word.
For example, if you hear, I'd like everyone to keep in that we're trying to cut costs.
You can say, I'd like everyone to keep in mind that we're trying to cut costs.
After each response, we'll provide the correct answer.
Let's begin.
What can you tell us about your factory's quality system?
What can you tell us about your factory's quality control system?
According to the product, these need to be made of copper.
Answer.
According to the product specs, these need to be made of copper.
Could you give me a rough of how much we spend on paper?
Answer.
Could you give me a rough sense of how much we spend on paper?
Answer.
Experience and education are two important criteria in hiring.
We've reached the end of this lesson, the second in our series on purchasing.
We've learned how to clarify design requirements and identify technical musts.
We've also learned how to set vendor criteria and qualification requirements.
And finally, we've looked at how to establish performance indicators for vendors.
Thanks for listening, and see you again soon.
