**3. Results and discussion**

A critical area to focus purchasing attention continues to be supplier quality management. Although supplier performance has likely improved in real terms over the last several years, supplier quality still does not fully satisfy continuously changing performance expectations. Measuring continuous supplier performance is not the only time when firms should evaluate suppliers. For most firms, supplier evaluation is central to their philosophy of quality at the source. Almost 70% of purchasing managers say that, the organizations use quantitative-based supplier evaluation process to check the capability and control techniques in there continuous quality improvement commitment. Around 80% firms assess supplier capabilities directly by cross-functional team site visits. Any kind of material or components either in semifinished, finished or raw material supplied by supplier has to be consider for calculating PPMeq and deciding which supplier has to be selected for doing business. If supplier having high PPM score consistently should be deleted from business list, PPM > 500 supplier has to be called or reviewed. Although most quality standards have been fulfilled till there are quality issues in manufacturing industry. According to ACMA reports 170 firms have already received ISO 9000 certification and 23 firms have received QS 9000 certification but still they are struggling to achieve excellence in quality.

In this work evaluation of the supplier has been done through Part per Million equivalents which help the OEMs to track the rejection rate at Plant level, Supplier level and Process level. Having high PPMeq the OEM can take a prompt decision regarding doing the business in future or to give time for improvement or to develop for excellence. Process-wise PPMeq can also help to find out the weak supplier for the particular process like Machining or Casting.

### **4. Conclusions**

An organization should measure supplier's performance because without measurement improvement cannot become possible, also supplier cannot improve and remove wastages as well as cost drivers so vendors should be measured to facilitate performance improvement and enhance competitiveness. Thus an informed business decision has been possible that impact the enterprise.

Supplier quality cost should be incorporated into a buyer's supplier rating system. Supplier rating should be involved not only traditional indicators like cost, quality, on time delivery but also supplier quality costs. When problems that effect on customers occur, the speed with which problems has identified solved and the solution implemented has a direct impact on customer satisfaction. To reduce cost of quality there should be supplier involvement so that the quality related problems can be resolved and analyze the occurrence of the problems and failure that take place due to the faulty method or processes for that suppliers must be actively participated to solve the shop floor problems.

Use of part per million equivalent technique help to the purchasing organization to take a decision related to supplier selection and evaluation in critical conditions. It helps purchase manager in decision-making process at the time of selecting single supplier from the available number of suppliers.

#### **Acknowledgements**

The authors sincerely thank the editor and the anonymous reviewers for their constructive and important comments on the chapter.

**13**

**Author details**

Lokpriya Gaikwad1

Navi Mumbai, India

Navi Mumbai, India

provided the original work is properly cited.

*Supplier Evaluation and Selection in Automobile Industry*

I confirm there is no "conflict of interest."

*DOI: http://dx.doi.org/10.5772/intechopen.84383*

**Conflict of interest**

© 2019 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium,

1 Mechanical Engineering Department, SIES Graduate School of Technology,

2 Mechanical Engineering Department, Lokmanya Tilak College of Engineering,

\* and Vivek Sunnapwar2

\*Address all correspondence to: lokpriya2007@gmail.com

*Supplier Evaluation and Selection in Automobile Industry DOI: http://dx.doi.org/10.5772/intechopen.84383*
