Vendor rating

it is a systematic method to evaluate suppliers performance using data from delivery of items in response to the purchase orders placed

Criteria for performance

price Discounts received Promptness of delivery Freight & delivery charges Installation cost service

Market information Co-operation Credit terms Disposition of rejects Inventory plans Financial position

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

 The weighted point plan- four performance factors are considered (qlty,delivery, prices & services).. Weights given to each factor.. Performance numbers are given to each supplier.. Suppliers overall rating =sum total ( wgt of each factor * performance number)

 Committee members- chief commercial manager, quality control manager, accounts manager, chief production. engr Meetings held quarterly Categories- A, B, C

 Critical incidents method- a record of events & occurrence related to the buyervendor relationship is maintained in each vendors file. Positive & negative aspect of performance is found

 Check list system- list based on performance factors is made.. Eg. Reliability technical capabilities aftersale services, availability, buying convenience, sales assistance..

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 finished goods. The amount of the production & distribution chain which is brought under the ownership of a firm.

 Backward integration- moving towards the sources of raw materials & parts. Forward integration- firm acquires the channel of distribution.

Quality

The sum total of features of a product which influences its ability to satisfy a given demand.

Dimensions of product qlty

Performance Features Reliability Serviceability Appearance Customer service

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

Quality assurance system

Understanding Custmr needs
Top mgmts commitment

Qlty certifctns

Qlty prblm mechanism

Tools for employee

Quality assurance system

Prevention of recurrence

Employee involvementt

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.

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 is being made.

 Technique for process is termed as process control. Technique for raw materials & finished goods is acceptance sampling.

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.

Variations Monitoring the process Specification limits for the output Control limits

 Central tendency & dispersions former linked with accuracy & the latter with precision

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

 Single sampling- two attributes n & c n- number of items in a sample from a lot. c- maximum number of defectives that may be permitted in the sample if the lot is to be accepted. If defects are more than c, the entire lot is rejected or inspected 100%

 Double samplingone small sample is drawn initially (n) two acceptance numbers c1 & c2 (c2>c1) c1- no: of defectives if c1 < c1, selected if c1 > c2 , rejected if c1 > c1but < c2 then..

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

 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.