hi!!

I am currently doing a project on supplier evluation in a company..
Now i am stuck with the quality issue...the comapny has various suppliers and each suppliers supplies more than 10 items...now how should i proceed with the supplier evaluation as far as the quality is concerned because if i take the rejection rate in to account then it would show hugh difference ..e.g. if a supplier supplies one item with qty 1 throughout the year and other item 1000 per year which has got some rejection...so it will carry difference...DPM criteria can also be used but pls tell me the procedure to use that criteria...

Thanks..

mil vid,

If you scroll to the bottom of this page you will find similar threads/topics on this subject.

Hope this helps.

By the way welcome to the cove. :bigwave:

hi!!

I am currently doing a project on supplier evluation in a company..
Now i am stuck with the quality issue...the comapny has various suppliers and each suppliers supplies more than 10 items...now how should i proceed with the supplier evaluation as far as the quality is concerned because if i take the rejection rate in to account then it would show hugh difference ..e.g. if a supplier supplies one item with qty 1 throughout the year and other item 1000 per year which has got some rejection...so it will carry difference...DPM criteria can also be used but pls tell me the procedure to use that criteria...

Thanks..

I guess I am a little confused by the question - does this supplier provide product from one commodity - such as all plastics, sheet metal, machined components? This is common - one supplier with multiple parts.

We have hundreds of different parts we supply to our customers. They are all the same commodity - sheet metal parts. Our customers look at the whole picture.

Perhaps you could break things out by commodity, instead of quantity.

It is hard to give you a good answer without some general indication of what kind of "items" the supplier is responsible for. I have evaluated lab consumables suppliers where one supplier had the best molding supplies for microanalysis, and another had the best cut-off blades for prep. Both could supply all products, but we evaluated supplier/product combinations for these things. Will that work for you?

Thank you all for taking interes in my problem..

The company in which i' doing my project basically deals with manufacturing compressors (Reicp, rotary and cetec). All the vendors who are supplying parts are local suppliers.

Now i'm suppose to carry out the evaluation on the basis of quality and i'm thinkin about takin DPM as the major criteria for the evaluation.

Now, the suppliers are supplying both the std components which are around 2000-10000 a year and non std components which are hardly 15-20 a year and my superiors want me to take all the items into consideration even if it is supplied once in a year. Let me give you an example. If a vendor supplies 2 qty of a single item in a year and 1 of it is rejected so DPM for this item will be 500000 and if the same supplier supplies 2500 qty of 2nd item with 0 rejection then DPM will b zero.


Now how should i evaluate this vendor on the basis of DPM? this is my question bacause DPM shows great amount of variation. So there are number of such vendors who are supplying such items. I hope you've understood my problem.

Thank you....

Hello all!!!

I'm waiting for your valuable reply... I guess i've made mysellf clear with the given example and i think now you all have understood my prooblem...

Thank you...

Hi buddy vid,

Seen one of my friend doing a very good analysis of supplier evaluation. He considers two major factors for determining the quality of supplier(s) , The quality of product supplied and the delivery schedule. For which he uses the follwing formula :

Q1 = (A+0.8*B+0.6*C+0*D)/ABC

Wherein
Q= Supplied item quality rating
A= correct lot received first time
B= Lot received with a few minor non conformities after correction
C= Lot received with a few major non conformities after correction
D= Lot rejected

Similarly

Q2 = (M+0.8*N+0.6*P+0*Q)/MNP
Wherein

Q2= Delivery rating
M= Lot received on actual time
N= Lot received 7-14 Days late from stipulated time period
P=Lot received 14-30 days late from stipulated time frame
Q= Lot received later than 30 days from stipulated time period

Q = (Q1 + Q2)/2

Wherein the Q = Overall quality

I would suggest you to bradly catagorize the purchased prduct into 3-5 groups as per the cost of purchase and then follow this exercise for all the catagories and for each supplier.

The figures 0.8 and 0.6 are arbitarily chosen, you can decrease thise numbers after the supplier reaches a particualr stage or rating. You can also impose n numbers of quality parameters to achieve at the final "Q".

After reaching this final Q , you will able to know how the supplier performance is.

Cheers:cool:

Arindam

I would like to ask what you are using now as a Supplier Quality Metric. We also struggled with this but we settled on PPM. The rational is that we have a metric to use.

Not only do I use the PPM during review, I also use the number of Nonconforming Reports issued for a supplier. It cost $$$ to write up, review and close out a nonconforming report.

Once a month Suppler Quality is review with Executive Management. We use the past month and the past 6 months data for the review. We also look at SCARs issued and closed.
Using % defective or dpm or ppm alone does not give the full picture of Supplier Quality.

I hope this helps,
Phil

Hey Arindam!!!

Thanks for that model...

I'll try it out and will come back to you...:)

Hi Phil!!

No one has ever done this thing before in the company and i'm the first one to touch this topic so currentl we don't have anything like metric...whatever ctiteria are to be defined is to be done b myself only...I also started with DPM but still need to define the metric...I would like to ask you what steps you had taken when you initiated with your company when you setteled with PPM?

Our steps taken to use PPM were not very elaborate. We were using percent defective, some of our management like PPM better. Conversations went back and forth over which was better or more appropriate due to our mix of quantities of parts purchased.
Finally PPM was chosen, we decided it is just a ratio, and as percentage, as long as we had a number to gage ourselves and suppliers to show improvement. This is why I also look and the number on nonconforming incidents, one number alone does not seem to give the complete picture.
In a previous job, I compared PPM, # of parts received, # of $$$ spent for the month. With several different sorts I see who was common in at least two categories. This was basically my risk assessment, and would set up my supplier evaluation schedule.
It really depends what work for your company, but you will need to look and several numbers for a complete picture.
Are you evaluated by you customers with any specific type of metric, would it be good to use the same metric?

Can you post me some of your examples of evaluation so that I can get the idea what kinda metric you have choosen..I've downloaded some spreadsheets from this forum only and from that i've made some of metrics but i think your metric will give me specific idea about my further steps...

Thanks...

Let me give you an example of what I'm currently doin...

Take a look at this table...

Item----------DPM-----% Variation DPM 10000---------% Variation withDPM 30000
1------------299436--------- 2894.36----------------------------898.12
2------------101934-----------919.34----------------------------239.78
3------------68167------------581.67----------------------------127.22
4------------59393------------493.93-----------------------------97.98
5------------50168------------401.68-----------------------------67.23
6------------47680------------376.80-----------------------------58.93
7------------39014------------290.14-----------------------------30.05

Take itto consideration these 7 items. I've calculated DPM based on rejection and i've found out % variation with allowable DPM of 10t000 and 30000....

Now what should i do? should i take average of % variation of DPM or something else?

One more thing can be i can assign % weight for regular intervals of DPM and based on that i can evaluate the overall score... Which method would you prefer? or can you suggest anything else??



provided all these items are supplied by only one supplier with different quantities throughout the year...

Our company is not a high volume shop. We may buy 4000 pieces of hardware, and 1 to 5 pumps in one month, so we get a variation, which makes it difficult to pick one method. We have tried to keep it simple by basically looking at the # of parts rejected (6 month average: total parts rejected vs. total parts received), and total # of nonconforming reports issued for the 6 months.
For the 6 month period we look at the suppliers with 10 or more parts rejected, and 6 or more nonconforming reports issued. We evaluate the list by seeing which suppliers are common in the two lists, and take corrective actions.
I hope this helps.