An impractical meaningless mass of data which take

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an impractical, meaningless mass of data which take too much effort to comply and is worthless to the purchasing department. Some companies make the error of adopting without changes, la rating plan which was developed for another company when, obviously, each system must be lifted to the specific requirements of one particular organization. Too often, also in attempting to ensure precision, the goal of improving quality and reliability of purchased item is lost. No system can be of any value unless it does not result in better vendor performance, nor can it work well unless the people involved understand it and are convinced that is worthwhile. A supplier or vendor rating system is a continuous management process, designed to measure, evaluate and improve supplier performance, enabling companies to make informed future sourcing decisions. In plain terms, the Vendor Rating system checks to what extent a supplier does what he agreed to do like quality, delivery reliability, flexibility and the price. As to Quality it compares the delivery to the agreed requirements (specifications). Quality problems may appear at incoming inspection or at any later stage. It would be helpful to develop a Quality Index, which lays down the relative number of quality problems a supplier has, in relation to the total number of deliveries he makes. In effect, a supplier or vendor rating system will allow a company to benchmark their supplier's performance against the performance of similar suppliers serving the company. Often online, the process can also be used to provide extremely important and useful feedback to suppliers in order to identify action plans and improvement opportunities. Rating systems are often designed to meet the specific objectives and priorities of the business with suppliers being measured against a standardized and weighted points scale. 18.3.2 EXPECTED OF A BETTER BUYER You're expected to solicit bids ... negotiate for lower costs and better service ... know exactly what should be included in contracts ... and come up with innovative cost-cutting ideas. But, probably the toughest part of your job is trying to squeeze the hours you need out of your busy schedule to keep up with the changes in the purchasing industry. There's no question that it's time consuming to explore new avenues for finding the best vendors and suppliers ... to keep abreast of the most up-to-date value analysis (VA) techniques ... and to check out current cost-saving ideas. 18.3.3 SOME WORKING DEFINITIONS Every company has its own culture and a technical vocabulary. Technical vocabularies tend to differ somewhat from one company to another. However, for
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224 the purpose of calculating the above mentioned Indices and in order to avoid misunderstandings, we should define exactly what we mean by the technical terms used in the definitions and equations. These definitions should be properly conveyed to the concerned vendor so as to make sure that the company and the vendor are talking about the same things. Some of the technical vocabularies are
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