Revolutionize Supplier Rating by Computerization

Article

Wind, James F.   (1991, ASQC)   Tecumseh Products Company, Tecumseh, MI

Annual Quality Congress, Milwaukee WI    Vol. 45    No. 0
QICID: 9701    May 1991    pp. 556-564
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Article Abstract

This abstract is an edited version of the author's original.

The objective of a computerized Supplier Rating System is to evaluate suppliers on the basis of nonconformance frequency and severity to one or more measures. It may also be helpful to evaluate how a supplier responds to reports of nonconformances. The authors provide examples from currently functioning systems as well as examples of pitfalls and difficulties associated with some of the possible options in a system.

Every attribute that has the potential to affect the company's bottom line should be rated; examples include quality, delivery, and price. There are several types of rating schemes that can be used. Objectivity, credibility, your company's needs, and the various elements that make up the rating system must all be balanced against the cost to implement them. There are several types of commercial data entry software for supplier rating systems; the software can provide various types of reports.

An effective Supplier Rating System adds a counter balance to the stress on price. Once credibility is established, the Supplier Rating becomes a useful tool to manage suppliers' performance.

Keywords

Customer supplier relationships,Procurement,Reports,Computers


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