Published on April 26, 2014
SUPPLIER PARTNERSHIP Supplier partnership is the discipline of strategically planning for, and managing, all interactions with third party organizations that supply good and/or services to your organization, in order to maximize the value of those interactions.
MANDATORY REQUIREMENTS OF SUPPLIER PARTNERSHIP • Supplier personnel should meet with buyer personnel beyond those in the purchasing office. • The price-only approach to buyer –supplier negotiations should be eliminated. • quality of supplier products should be guaranteed by the supplier’s quality processes.
MANDATORY REQUIREMENTS OF SUPPLIER PARTNERSHIP • quality of supplier products should be guaranteed by the supplier’s quality processes. • Both partners should be capable of sharing information electronically so that the relationship is not inhibited by paperwork. Electronic data exchange is particularly important for successful Just in Time (JIT
MANDATORY REQUIREMENTS OF SUPPLIER PARTNERSHIP • The supplier should fully understand and be able to practice just-in time (JIT). Buyers should not need to maintain inventories.
ROLE OF SUPPLIER PARTNERSHIP • 1. Timeliness • 2. Information • 3. Product evaluation • 4. Monitor customer complaints • 5. Awareness of product liability laws • 6. Ensure necessary tests are done • 7. Provide dependable products
ROLE OF SUPPLIER PARTNERSHIP • 8. Anticipate changing needs and acting on them • 9. Commitment • 10. Compliance with mandatory standards • 11. Communication • 12. Plan ahead for recalls
Impacts of quality improvement • 1. Customer and society • 2. Companies’ performance • 3. Nation’s economy
Supplier Selection • supplier should be selected based on their technological capabilities and their ability to deliver as per schedule.
Supplier Standards: • 1. Quantity required • 2. Quality requirements • 3. Specifications for the materials • 4. Delivery instructions • 5. Payment terms
Vendor Rating system It is quite useful in evaluating objectively the quality, price and delivery of the vendors an ongoing manner. May be rated on Quality, Price and Delivery.
Quality Rating QR for a lot or consignment • QR = Q1 +.Q2+X2.Q3 Q • Q1 - quantity accepted • Q2 - quantity accepted with deviation • Q3 - quantity accepted with rectification • Q4 – quantity rejected • Q - Total quantity supplied = Q1 + Q2 + Q3 + Q4 • X1 – demerit factor (less than one) when material is accepted w/ deviation • X2 – demerit factor (less than one ) when material is accepted with rectification. • The values of X1 and X2 are to be decided by the management.
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