Quality Manual-Suppliers Selection, Approval & Evaluations

Purpose:

To ensure that Suppliers are selected on the basis of their capability to meet the requirements of "Your Company" and therefore evaluated and controlled properly.

Scope:

This procedure is applicable to the selection and periodic assessment of Suppliers who supply raw, packaging, machinery, equipment, and other locally available materials to"Your Company".

Definition:

Supplier/Vendor: Person or organization, which has the potential of supplying materials for use by "Your Company".
Indenters: Local Representatives of overseas suppliers.

Responsibility:

It shall be the joint responsibility of Purchasing, Production, Quality Assurance participate in the selection and evaluation of any Supplier/Indenter.
Procurement department in recognition of Top Management is responsible for selection of Suppliers for local & foreign purchase.

Procurement Manager, Production manager, Quality Assurance Manager and Store are responsible to verify quality of Supplier’s products.

Method:

Supplier/Vendor Selection:

"Your Company"d shall purchase raw and packaging materials and other items through both local and foreign Suppliers.
The need for a new Supplier can be determined by Quality Assurance, Production, Maintenance, and Purchasing Departments.
New Suppliers shall be selected on the basis of their past experience and ability to supply quality products, with competitive price and required delivery time.

Selection Procedures of Local Suppliers/Vendors:

Procurement Manager or authorized nominee shall select local Suppliers on the basis of their past experience, quality of products supplied, their prices and delivery.
For selecting new local Suppliers, Procurement Manager or authorized nominee shall verify the specifications of the purchasable materials, samples (as appropriate) and compare with the existing specifications. In case of local Suppliers having manufacturing facilities, the facilities shall be audited (if needed) before selecting them as approved Suppliers.
If the specifications of the products or materials are found to be satisfactory, Procurement Manager shall then ask the Suppliers to submit prices for comparison with current prices of other Suppliers. If the prices are found within acceptable limits, and test sample are acceptable, then he will recommend the Supplier(s) to Top Management for inclusion of the name in the Approved Suppliers List (ASL) of local Suppliers.
After getting approval from Top Management, Procurement Manager shall then enlist the Suppliers in the Lists of Approved Suppliers List (ASL). The ASL may be categorized item-wise.

Selection Procedures for Foreign Suppliers/Vendors:

After a prospective foreign Supplier or Indenter is identified as a possible source of a material, Procurement Manager shall ask the prospective Supplier for supplying documentary evidence that may prove to be a good Supplier. Subject to satisfactory survey report about past experience, Procurement Manage shall ask the prospective Suppliers or their local representatives/indenter to submit samples of raw and other materials with their product specifications, certificates of quality test etc.
In case of new raw materials and new Supplier, Quality Assurance/Production Dept. shall verify the quality of the Supplier’s products by detailed test and analysis and submit report to Procurement Manager . After getting satisfactory report from the QA, Production Dept., Procurement Manager shall ask the Suppliers/indenters for quotes of samples.
Request for quote shall clearly indicate the detailed specifications of materials or products, their quantities, source of origin, name of manufacturers and suppliers, Name of local indenters/representatives and delivery schedule.
If the specification and quality of the product are acceptable, quotation is competitive and the price is well within the range, the Suppliers might be provisionally selected.
Later on after successful shipment and acceptance of a particular consignment of raw materials and machinery parts for the plant; the Supplier will be placed in the Approved Suppliers List (ASL) of Overseas Suppliers provided other selection criteria are met.
At times depending on urgency and circumstances, the Top Management may use his discretion to enlist name of any overseas Supplier provisionally pending its performance and subsequent placement in the ASL.

Choose Your Supplier

Selection of Suppliers/Vendors for a Particular Import Order:

First of all Procurement Manager will ask the Suppliers/indenters of ASL to supply pre-purchase-samples with their specifications, quality test reports/certificates. Subject to satisfactory quality report by "Your Company" of QA, Production Dept. the Suppliers shall be requested to quote in bulk quantity.

Depending on the price and terms and conditions of delivery, the Top Management shall approve one or more Suppliers for importing a particular batch or consignment of raw materials, equipment, machinery parts, or other importable items.
After the selection of Supplier(s) Procurement Manager will start processing to open Letter(s) of Credit. After the shipment and arrival of the consignment(s) at the port, subsequent clearance will be made and samples will be sent again for quality testing by "Your Company" QA, Production Dept.
At the end of the month upon receipt of the satisfactory quality report from Quality Assurance Dept. or from the Material Receive Register maintained by Store Dept. be used ‘Supplier History Form’ will be filled by the Head/Executive of Procurement Dept.

Comparative Performance study of Local Suppliers/Vendors:

Procurement Executive shall maintain ‘Supplier History Form for all local and foreign suppliers. This form shall be updated once a supply is received from Supplier.
Summarizing all Supplier History Forms, Procurement Manager will evaluate the local and foreign suppliers once in every year. Following system shall be used to evaluate the suppliers of "Your Company".
Procurement Manager will fill up the Supplier Evaluation Form based on the respective Supplier History Form.
Evaluation will be done material wise and in the following three categories.

Quality: Good Satisfactory Unsatisfactory
Delivery: Prompt Satisfactory Unsatisfactory
Price: Highly Competitive Reasonable High

A Sample format for supplier

To be on the ASL, a supplier should have at least “Satisfactory” in the ‘Quality’ and ‘Delivery’ category and “Reasonable” in ‘Price’ category.
Based on the overall performance of the supplier, Procurement Manager will write comments/recommendation on the Supplier Evaluation Form.
Top Management shall be responsible to approve the Supplier Evaluation Form
Only the approved Suppliers will be in the Approved Supplier List (ASL).
An Evaluation Form will be used for a particular supplier to evaluate its last one-year performance. Procurement Manager will update the Approved Supplier List (ASL) based on the evaluation form of each supplier.
Purchase will be carried out from the ASL; however purchase could be done from other Suppliers, which aren’t in the ASL with prior approval from Top Management.