vendor development in pharmaceutical industry
TRANSCRIPT
VENDOR DEVELOPMENT
Department of Pharmaceutics MCOPS, Manipal University
Presented by : Shikha singh160617009
Under the guidance of :Dr . Mahalaxmi Rathanand
2 CONTENT INTRODUCTION VENDOR DEVELOPMENT VENDOR EVALUATION VENDOR RATING PROCEDURE APPROVED VENDOR LIST VENDOR CERTIFICATION CONCLUSION REFERENCES
3 INTRODUCTION
VENDOR: Vendor means a person who sells & supplies his
products An intelligent purchasing involves the rational
selection of sources from which materials can be obtained
Efforts are needed in identifying, developing and evaluating the prospective suppliers
Essential to continuously appraise the performance of the current suppliers
4 VENDOR DEVELOPMENT
Process of development of the most economical ,efficient & willing source to continually serve the industry
Essential for buying of material in right quantity of right quality at right price from right source at right time and place
5 Why we need vendor development? To provide a system to valuate suppliers to
supply materials such as raw & packing conforming to specified requirement
To make sure the vendors understand tasks which they must be completed & verify and their completion deadlines are reflected accurately on the project schedule
To interview the prospective key personnel both the integrator and the manufacturer
6 VENDOR EVALUATION
One of the most important processes performed in organizations today is the evaluation, selection & continuous measurement of suppliers
Criteria's are fundamental to choose the best supplier
The evaluation is done especially on two counts, namely quality and delivery
The purpose of vendor evaluation is to ensure a portfolio of best in class suppliers is available for use
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Based on the information obtained via the evaluation, a supplier is scored & either approved/unapproved as one from whom to procure materials or services
ASL- qualified supplier is then added Approved vendor- re-evaluated periodically or
annually Suppliers are selected according to their ability
to supply quality goods AVL- listing of various types of suppliers &
providers that a company has agreed meets its standards in terms of quality and price
8 VENDOR RATING
Vendors or suppliers are given standing, status, or title according to their attainment of some level of performance
It may take the form of a hierarchical ranking from poor to excellent
Increased outsourcing
Need for effectiveness
Strategy for improvement
9 How vendors are rated?
• Quantity• Quality• Price• Source• Time• Service• Place
7 Rights
10 Rating parameters
Quality performances
Delivery performance
Price performance
Time schedule
Quantity schedule
11 Quality performance It is the measure of material not in conformance
with given specifications A supplier can be judged for quality performance
from the view point of rejected lots This takes into account the no. of defects as well
as seriousness of defects Ex: If a supplier has supplied 100 pieces and 10
pieces are rejected from the lot, he has rating of 90%.
(Number of lots accepted/Number of lots supplied)100 = weightage
(90/100) 100= 90%
12 Delivery performance It measures the promptness of vendor in keeping
schedules of delivery, removing of rejected materials and nature of response to other activities
Delivery performance thus can be made into 2 ways1. ADHERENCE TO TIME SCHEDULE It can be calculated by following formula(No. of deliveries made in time/Total no of scheduled deliveries) weightage2. ADHERENCE TO QUANTITY SCHEDULEIt can be measured by the following formula(Quantity supplied/Scheduled delivery) weightage
13 Price performance
It is another very important criteria for evaluating a vendor
It is a measure of price differential for the same product supplied by the different vendors
It can be evaluated as (Minimum price offered/vendor price) weightage
14Factor weightage
Quality 70
Service 20
Price 10
For example, assume that 160 lots were received during a year & 16 lots were rejected on account of poor quality Quality rating = (No. of lots accepted/No. of lots
supplied)70 Quality rating = (144/160)70 = 63 Adherence to time schedule (No. of deliveries made in time/ Total no of scheduled deliveries)20 Adherence to quantity schedule (Quantity supplied / Scheduled delivery)20 Price performance = (Minimum price offered / Vendor
price)10
15 Methods for vendor rating
Categorical plan: Very subjective method Managers from concerned department prepare
list of factors important from their views Each of the major supplier is evaluated against
each evaluator’s list of factors evaluation is done in the terms of
1. Good 2. Satisfactory 3. Poor
16 Categorical plan POINTS REMARKS
80-100 Excellent
70-80 Very good
60-70 Good
50-60 Average
40-50 Very poor
17 Weighted point plan
Based on:1. Quality of goods received2. Promptness of deliveries made3. Quality of service given by vendor
Buyers decides on:1. Factor important form evaluation2. Weightages for each factor3. The vendor performance in respect of each factor
18 Cost ratio plan
Vendor rating is done on the basis of various costs incurred for procuring the materials from various suppliers
The cost ratios are ascertained for the different rating variables such as
Quality Price Timely delivery
19 Cost ratio plan
The cost ratio is calculated in percentage on the basis of total individual cost & total value of purchase
Example
The total delivery cost is Rs5000 and the total purchases are Rs 1,00,000 then delivery cost ratio will be
5,000 / 1,00,000 x 100 = 10%
20 PROCEDURE FOR VENDOR DEVELOPMENT
Source selection of vendor
Request for quotations
Receipt and analysis of quotations
Evaluation of vendor
Evaluation by QA department
21 Evaluation by QA department
.• Samples from 3 consecutive batches/lots of API
should be procure sample along with COA
. • QA should analyze the samples
.• Analytical report along with the comments of QA
department shall be send to purchase department
22• Vendor will be included in the temporary approved
vendor list if sample meet the specification
• List is entered manually & approved by QA & QC head till the list is amended
• Purchase department after studying the comment from QA shall inform the supplier for supply
Purchase department shall carefully study the quality aspect & also quantity and financial aspects of the vendor
Vendor approved by the product license holder will be listed separately
23 APPROVED VENDOR LISTInitial sample evaluation & approval of initial supply
Vendor is audited by manufacturing, engineering,
QC, purchase department
Audit that the vendor is following GMP requirements
Vendee is satisfied with vendor performance
Responsibility of the purchasing department to keep the approved vendor
list maintained
24 Approved vendor list contains1.Material ID number2.Vendors name3.Contract number4.Vendor class5.Material description 6.Vendor certificate ID 7.Product supplied by vendor8.Last audit date9.Specification approved such as date of approval
by QA, QC & production department
VENDOR CERTIFICATION
Vendor certification is a supplier-customer partnership & can only be successful with the full involvement & agreement of both partners
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Forms of certificatio
n
Certificate of test
Certificate of
compliance
26 Certificate of test:- This document, issued by a test laboratory, states that certain product was tested for certain qualities the product is identified by description, amount, lot no. etc
Certificate of compliance:- This is an assertation the product complies to specification. This certifies that the material delivered under this contract is in accord with the terms of the contract
In some companies the formalising of this act includes sending the vendors a document, that is a certificate to attest to the fact that the vendor as reached the state of qualification described in the document
To designate the process used in formalising a vendor contract
27 CONCLUSION
It is important to have a good vendor development plan in a company
Vendor approval, vendor rating should be carried out periodically & if need arises, companies should change the vendors and approve vendors who can serve the company in a better way
It is equally important to have a good vendor-vendee relations which helps companies to procure materials at right time in right quantity and at right place
28 REFERENCES
1.Khanna O.P, Industrial Engineering and Management, Revised 1st edition, pg: 23.9-23.11
2.Datta A.K, materials management procedures, text and cases, 2nd edition, pg: 88-104
3.Amrine Harold T., Ritchey john a, Hulley Oliver s, Manufacturing Organization and Management, 4th edition, pg:250-253
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