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Vendor rating

it is a systematic method to evaluatesuppliers performance using data from

delivery of items in response to thepurchase orders placed

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Criteria for performance

price

Discounts received

Promptness of delivery Freight & delivery charges

Installation cost

service

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Market information

Co-operation

Credit terms Disposition of rejects

Inventory plans

Financial position

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Techniques used

Categorical plan-personnel from various

divisions.. Maintains informal evaluation

record.. for each supplier individual list of

performance factors.. monthly meeting..

Group evaluation of each major supplier

Three categories- preferred, neutral,

unsatisfactory

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The weighted point plan- four performance

factors are considered (qlty,delivery,

prices & services).. Weights given to each

factor.. Performance numbers are given toeach supplier.. Suppliers overall rating

=sum total ( wgt of each factor *

performance number)

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Committee members- chief commercial

manager, quality control manager,

accounts manager, chief production. engr

Meetings held quarterly

Categories- A, B, C

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Critical incidents method- a record of

events & occurrence related to the buyer-

vendor relationship is maintained in each

vendors file.

Positive & negative aspect of performance

is found

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Check list system- list based on

performance factors is made..

Eg. Reliability technical capabilities after-

sale services, availability, buying

convenience, sales assistance..

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Vertical integration

The degree to which a firms own

production system handles the entire

supply chain starting from procurement of

raw materials to distribution of finishedgoods.

The amount of the production &

distribution chain which is brought underthe ownership of a firm.

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Backward integration- moving towards the

sources of raw materials & parts.

Forward integration- firm acquires the

channel of distribution.

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Quality

The sum total of features of a productwhich influences its ability to satisfy a

given demand.

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Dimensions of product qlty

Performance

Features

Reliability Serviceability

Appearance

Customer service

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Quality assurance

All those planned or systematic actions

necessary to provide adequate confidence

that a product or service will satisfy given

requirement for quality.

Three aspects-

Incoming raw materials

Proper processes

Quality of the outgoing finished goods

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Quality assurance system

Tools for

employee

Employee

involvementt

Top mgmts

commitment

Quality assurance

system

Qlty

certifctns

Understanding

Custmr needs

Qlty prblm

mechanism

Prevention of

recurrence

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Inspection & quality control

Inspection- primarily a comparison with

established standards.

Quality control- refers to all those functions

or activities that must be performed to fill

the companys qlty objectives. It includes

qlty dvlpmt, qlty maintenance & qlty

improvement.

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Statistical quality control

The application of statistical techniques to

accept or reject products already

produced, or to control the process &

therefore, product quality while the part isbeing made.

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Technique for process is termed as

process control.

Technique for raw materials & finished

goods is acceptance sampling.

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Statistical process control

Controlling quality during production.

Monitoring of the various physical

variables operating in the materials & the

correction of the variables when they

deviate from the previously established

norms.

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Variations

Monitoring the process

Specification limits for the output Control limits

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Central tendency & dispersions

former linked with accuracy & the latterwith precision

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Acceptance sampling

A statistical technique used to take a

decision regarding acceptance or rejection

of a lot without having to examine the

entire lot.

Types

Single sampling

Double sampling

Sequential sampling

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Single sampling- two attributes n & c

n- number of items in a sample from a lot.

c- maximum number of defectives thatmay be permitted in the sample if the lot is

to be accepted.

If defects are more than c, the entire lot isrejected or inspected 100%

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Double sampling-

one small sample is drawn initially (n)

two acceptance numbers c1 & c2 (c2>c1)c1- no: of defectives

if c1 < c1, selected

if c1 > c2 , rejectedif c1 > c1but < c2 then..

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n2 is drawn & inspected

(c1+c2)- gives total defectives from n1 &

n2

when compared with c2

if c1+ c2 > c2, rejected

if c1+ c2 < c2, accepted

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Sequential sampling- units are randomly

selected from the lot & tested one by one.

Based on each testing reject or accept or

continuous sampling decision is made.