Optimization Methods in Plant Operation

**3**

**Chapter 1**

**Abstract**

the supplier selection process.

**1. Introduction**

Supplier Evaluation and Selection

In automobile industry, to operate effectively the supply chain management, the purchasing function is very important to perform effectively. It is the responsibility of purchasing department to choose the correct suppliers to purchase the required products for their company. Thus, supplier evaluation technique is essential for purchase manager's point of view to choose the best supplier among available suppliers. The literature addresses quality, delivery, technology, value and service as the five most common criteria used for supplier quality evaluation. In this chapter, approach of evaluation and selection of supplier has been presented as per the ISO 9000/TS16949 standards. Considering the most important criteria for evaluating the quality of suppliers based on a review of the literature and observation in practice. Finally, these organizations continuously review and implement effective quality systems following the rigorous ISO 9000/TS16949 series of standards and most automobile companies have developed in-house procedures and software for

**Keywords:** supplier assessment, supplier selection and performance evaluation,

Conventionally firms have been divided in operational functions and each department take care of their own responsibility and manufacturing functions from procurement of raw material to dispatch of final products to the customer. Due to this reason, most of the organization purchasing commands a significant role, since purchased parts and components represent 40–60% of the sales [1] of its end products. This means with small cost saving in the acquisition of materials can

There has been an evolution in the role and structure of the purchasing function that gained great importance in the supply chain management due to the globalization and accelerated technological amend. It involves buying the raw materials and components for the organization to meet current need. The actions connected with it include selecting and qualifying suppliers, rating supplier performance, negotiating contracts, comparing price, quality and service, sourcing goods and service, timing purchases, selling terms of sale, evaluating the value received, predicting price, service, etc. Main responsibility of the purchasing department is the selection and evaluation of capable suppliers which brings

supplier quality cost, supplier rating, part per million equivalents

have a greater impact on profits of the organization.

in Automobile Industry

*Lokpriya Gaikwad and Vivek Sunnapwar*
