**2.4 Process audit**

Process audit for the manufacturing is quality tool to assess the continuous improvement of the organization in process/product performance. Doe to process audit, it become easy to analyze, maintain and improve quality system. So process audit become essential for the organization to sustain into competitive environment. Based on ISO 9001 certification requirement internal audit has to be conducted.


#### **Table 2.**

*Performance score based on the focus area.*

**11**

*Supplier Evaluation and Selection in Automobile Industry*

Due to customer awareness and global competition there is tremendous pressure on manufacturing firms to improve quality and reduce cost of the product. Each organization is struggling to meet customer varied demands as well as meet environmental regulation applied by government so that process/product should be ecological feasible. Audit is one of them to assess current state of nature and future plan of action to improve quality of the product and process. Audit can be used throughout the business area of quality, production, safety, human resource, purchasing, accounting, etc. [6]. Many organizations not only manufacturing but also service industry, have conducted the audit or been audited in order to comply

The International Organization for Standardization (ISO) is a set of standards that "makes the development, manufacturing, and supply of products and services more efficient, safer and cleaner" [8]. The ISO has created several standards, but the best-known ones are ISO 9000 and ISO 14000. ISO 9000 is used for assessing quality requirements, while ISO 14000 is a standard for environmental quality management. ISO 9000 and ISO 14000 are known as "generic management system standards" because they can be applied to any product, material or service [8]. An ISO certificate can be given to any organization after it prepares its documents containing a description of its business practices in line with the guidelines provided by ISO. According to [9], having ISO 9000 has the

1.**Way in to markets:** having ISO 9000 certification helps organizations to maintain and increase number of customers. Due to globalization, it is essen-

So now it become need that supplier should have ISO certification.

3.**Quality system improvement:** due to certification, quality system of the organization gets improved and also organization prepares itself for quality

4.**Other benefits:** the certificate is recognized around the world, and can

Organization should have formal measurement process which improves the supply base of the vendors than those vendors without having such type of formal

On the other hand, firms should have standardized supplier performance metrics to reach better results at least 25% performance improvement can be seen in

However, supplier performance metrics changes from organization to organization depending upon their needs and capabilities of the supplier supplying part or components to them. But agreeing on standard metrics for evaluating vendor performance is easy than on firm basis where different firm units have varied goals,

**2.6 Normalize supplier measurement procedures across the enterprise**

develop quality through recovering an organization's overall competitiveness.

2.**Customer requirement:** customers buy the product from certify supplier only.

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

with certain standard requirements [7].

**2.5 ISO 9000 and ISO 14000 standards**

tial to certify and enter into global market.

following benefits:

auditing.

measurement process.

requirements, and suppliers.

this process.

**Figure 2.**

*Supplier performance improvements.*

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

*Industrial Engineering*

**2.4 Process audit**

**2.3 Collaborate with suppliers**

this information internally (see **Figure 2**).

*The maximum possible score for the Month or Year-to-Date is 100 points.*

*Performance score based on the focus area.*

**Level 3:** a supplier having score 31–50 points kept on conditional level of performance. Assurance team must work to lift them to achieve level 2 or level 1 status. **Level 4:** a supplier having score 30 points or below is a restricted supplier, any

Enterprises that shared performance data with suppliers were able to generate 62% greater improvements in supplier performance than enterprises that only used

Based on a data purchaser can find out the opportunities to improve and develop the supplier performance by sharing business information. Many organizations can

Process audit for the manufacturing is quality tool to assess the continuous improvement of the organization in process/product performance. Doe to process audit, it become easy to analyze, maintain and improve quality system. So process audit become essential for the organization to sustain into competitive environment. Based on ISO 9001 certification requirement internal audit has to be conducted.

**Sr. Nos. Focus area Allocated score** 1. Delivery (0–20 points) 2. Lead time (0–20 points) 3. Quality (0–20 points) 4. Productivity savings (0–20 points) 5. Payment terms (0–20 points)

time they exist and another alternative source has to be find out.

collaborate with their supplier in exchange of design and process data.

**10**

**Figure 2.**

**Table 2.**

*Supplier performance improvements.*

Due to customer awareness and global competition there is tremendous pressure on manufacturing firms to improve quality and reduce cost of the product. Each organization is struggling to meet customer varied demands as well as meet environmental regulation applied by government so that process/product should be ecological feasible. Audit is one of them to assess current state of nature and future plan of action to improve quality of the product and process. Audit can be used throughout the business area of quality, production, safety, human resource, purchasing, accounting, etc. [6]. Many organizations not only manufacturing but also service industry, have conducted the audit or been audited in order to comply with certain standard requirements [7].

## **2.5 ISO 9000 and ISO 14000 standards**

The International Organization for Standardization (ISO) is a set of standards that "makes the development, manufacturing, and supply of products and services more efficient, safer and cleaner" [8]. The ISO has created several standards, but the best-known ones are ISO 9000 and ISO 14000. ISO 9000 is used for assessing quality requirements, while ISO 14000 is a standard for environmental quality management. ISO 9000 and ISO 14000 are known as "generic management system standards" because they can be applied to any product, material or service [8]. An ISO certificate can be given to any organization after it prepares its documents containing a description of its business practices in line with the guidelines provided by ISO. According to [9], having ISO 9000 has the following benefits:


#### **2.6 Normalize supplier measurement procedures across the enterprise**

Organization should have formal measurement process which improves the supply base of the vendors than those vendors without having such type of formal measurement process.

On the other hand, firms should have standardized supplier performance metrics to reach better results at least 25% performance improvement can be seen in this process.

However, supplier performance metrics changes from organization to organization depending upon their needs and capabilities of the supplier supplying part or components to them. But agreeing on standard metrics for evaluating vendor performance is easy than on firm basis where different firm units have varied goals, requirements, and suppliers.
