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Vendor Rating & Supply Sources Guide

Vendor rating involves evaluating existing or new suppliers based on factors like delivery, price, quality, capacity, and service. There are typically 4 stages: 1) preliminary information gathering, 2) detailed performance analysis, 3) negotiation and selection, and 4) experience after trial orders. Rating methods include income material rating (quality, price, service), categorical (experience-based), cost-ratio (actual costs), key questions, and matrix (multiple factors). Maintaining multiple qualified sources of supply is important. Locating sources involves directories, visits, catalogs, handouts, advertisements and publications.

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94 views9 pages

Vendor Rating & Supply Sources Guide

Vendor rating involves evaluating existing or new suppliers based on factors like delivery, price, quality, capacity, and service. There are typically 4 stages: 1) preliminary information gathering, 2) detailed performance analysis, 3) negotiation and selection, and 4) experience after trial orders. Rating methods include income material rating (quality, price, service), categorical (experience-based), cost-ratio (actual costs), key questions, and matrix (multiple factors). Maintaining multiple qualified sources of supply is important. Locating sources involves directories, visits, catalogs, handouts, advertisements and publications.

Uploaded by

richa_yaduvanshi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Vendor Rating

And
Sources of Supply

-Richa Yaduvanshi
MBA-Agribusiness
Vendor Rating

Assessment of existing or new suppliers on the


basis of their delivery, price, production
capacity, quality of management, technical
capabilities, and service.
STAGES OF EVALUATION

There are 4 stages of evaluation:


1] Survey stage - It is based on preliminary information. All the possible
source are used to explore vendor capabilities.
2] Enquiry of stage- This stage consist detailed analysis of the vendors
performance with other consumers.
3] Negotiation and Selection stage- the vendors who pass the selection
stage are called for the negotiation. In this stage buyer and vendor
negotiate on all aspects and the list of approved vendors are drawn.
These three stages are considered as apart of source development and
source registration process.
4] Experience Stage-this is the stage when supplier start sending the
material after trial orders. The parameters used here are quality,
price, delivery, schedule, service.
Methods of Rating
A large number of methods, using quality, price, delivery schedule,
and service are used for vendor rating.

1. Income material rating plan:


This method was developed by General Electric Company. In this
scheme the quality control department complies a list of
troublesome items may be because of price or quality. from list a
single item is selected and total of 100 points are allocated as
follows:
40 points for quality
35 points for price
25 points for service.
2. Categorial method
• This method depends on experience and judgment of buyer
and therefore it may be subjective.
• The buyer makes out a list of all parameters and performance
report is prepared.

3. Cost-ratio method
• This method involves computing the actual costs incurred in
procurement , chasing , transport, packaging, receiving
materials, etc.
• The unit cost incurred by the buyer on the material, when
actually received is then computed.
• Higher is the cost, lower is the supplier’s relative rating.
4. Key Questions Approach

• Many questions are asked from supplier about the item in this
method.
• These questions include issues on management, labour, finance,
technology, development, service aspects.
• At the end balanced perspective of supplier emerges.

5. Matrix Method:
• When there are more number of suppliers and more factors being
considered, the matrix approximate of comparisons is useful.
• The vendors are listed horizontally and the factors vertically.
• Individual marks are entered for each factor and the total is
computed.
SOURCE OF SUPPLY
• The buyer has to locate, develop and preserve source of
supply. The scientific purchasing requires at least two sources
of supply.
• The efficiency of source depends on its capacity to match the
user’s high tech, narrow tolerance, quality requirement, etc.

SOURCE LOCATION
Buyer builds a directory of purchases, which has to be
updated periodically.
This directory can be catalogue of items, with full description
along with up to date prices.
Directory can be built from the following
information:
I. Information received from marketing department.
II. Periodic visit to industrial units.
III. The buyers guide published by the Indian Standard Institute lists a
large number of items by the manufacturer who are licensed to use
ISI certification mark. the Directory catalogue of the member’s
products published by industrial associations like the All India
Manufacturers Organisation.
Other information leading to source identification includes the following:
a) The hand outs of the DGTD-Directorate General of Technical
Development.
b) The supplier Directory of the DGS&D-Directorate General of Supplies
and Disposal.
c) Visiting cards of salesmen.
d) Advertisement in trade journals.
e) Announcement of new products in newspapers.
f) Technical magazines.

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