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Purchasing tools for an organisation

Updated on December 19, 2009

Purchasing or procurement plays a very pivtol role in manufacturing organisation , Providing seamless flow of quality raw material for the production . Big companies have large vendor base and these vendors have to regularly evaluated on their performance,

In recent developments of purchasing tools supplier or vendor management has acquired importance .Vendors are supposed to be the part of companies supply chain and any weak link can effect the entire chain .Vendor management is the process of defining the structure for how relationships with suppliers will be developed and maintained. It involves defining certain standards and making sure these are consistently met.

What is vendor evaluation ?

All vendors are subjected to quantitative ratings for different areas of competencies such as delivery compliance , rejection or quality , price , responsiveness, facility , technical competency . etc

Vendors could be the contract manufacturers or offshore suppliers . Now days we can find Vendor evaluation software's which generates accurate reports on the vendor performance on pre set parameters .

Vendor Ratings

After intial registration and on site inspections of vendor facility and few deliveries vendors are monitored for parameters and are ranked on the scale of 1 to 5 or any other scale . After continuosly ranking these vendors the best performers are awarded with more orders and the worst performers are phased out with new vendors hence these ratings improves the plant or production efficiency indirectly .

Vendor relationship s

Vendor are awarded with more orders on annual contact based on their performance Or else can be acknowledged with some for of certificate of appreciations in public .further buyer could send its technical team to assist vendors team in finding out innovative methods which can result in savings .Relationships with vendors are based on trust ,reciprocality ,transparency and mutual agreement on terms and conditions which is a win win situation for both.

Standardisation and Codification

All material procured or sourced are codified so as to record the prices ,sources and can find the trends . It helps in keeping track of stocks ,finding out best vendors in case of multi location manufacturing units .

ERP ( Enterprise Resource Planning)

Every organisation have installed ERP packages from various sources such as SAP , BAAN or ORACLE or some sort of IMMS ( Integrated Materials Management System) .These resources helps in numerous ways as one can analysis several datas and take decisions on these analysis.


With advent of world wibe web procurement transactions are now being done online . Its has helped sourcing material online and helped companies in  reducing cost ,as  purchaser can now   source material from other countries


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