Page 101 - DMGT525_MATERIALS_MANAGEMENT

Materials Management

Notes Plant Visit

Plant visit is to be organized to observe the further short listed suppliers. Usually, it is done by
a cross-functional team on a pre-appointed date.

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Caution Specific things to be observed during the plant visit must include the following:
 Modernity and efficiency of equipment and process
 Facility for production control, quality assurance and cost control system

 R&D capability
 Caliber of technical and managerial staff
 Inventory control policy for raw materials, parts and components
 Industrial relations

 Morale of personnel at all levels
 House keeping
Invariably during plant visit, the team should carry a pre-designed form to carry out plant
observation. Form ensures that nothing is missed out. Data obtained at enquiry stages and plant
visit are summarized and tabulated.

Analysis of Information

Steps involved in evaluating the suppliers are discussed below:
1. A set of key factors is chosen.

2. Weight is assigned to each factor.
3. A nominal scale (say 1-5) is chosen. Here 1 indicates lowest rating and 5 highest rating.
Each supplier is rated under each factor using this scale.

4. Net rating of a supplier under a factor is the product of rating under a factor and weight
assigned to the factor.
5. Sum total of net rating under each factor for a supplier gives the total rating. In a similar
manner, the total net rating of other suppliers is calculated. The highest net rating denotes
the best supplier.

Whether to Buy from Local or National Vendors?

Advantages of buying from local vendors include: greater responsiveness, high level of service,
increased goodwill from local community, JIT System (Just in Time System). On buying from
national vendors, buyers get superior technical service, low price due to economies of size, etc.

Number of Suppliers: Multi/Single

Nowadays, the trend is towards reduced number of supplier base, in some cases single
supplier.

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