development of automotive components

7/28/2019 development of automotive components

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Section 1 - General InformationAll Supplier related transactions are through SAP, Single server environment.

Suppliers are provided with free connectivity through intranet services SRM (Supplier

Relation Management), which is compatible to SAP. Suppliers can view Purchase Order

details, schedules for the delivery of goods, status of their quality acceptance of

supplies, payments. The quarterly feedback on Supplier Rating and Tata motors

standards which are to be followed at their end can also be viewed through SRM.

Periodic supplier meets are conducted to provide a forum for the Suppliers to meet

Senior Officers of the organization, and have formal communication on matters of

mutual interest.

Suppliers are requested to contact the representatives of the following functions for

queries, if any, during the course of supplies.

a) Issues on items under development with Purchase organization

Ancillary Development Department (ADD),

b) Issues regarding POs and schedules on items with Purchase organization

- Auto Materials and concerned Factory Logistic Group (FLG).

c) Issues regarding quality, primary rejection, line rejection, rejection disposal, warranty

complaint, debit due to quality issues, Self Certification-- Quality Assurance

Department.

d) Issues regarding payment -- Finance Department.

Section 2: Quality systems at Tata Motors

2.1 Quality System Requirements

The supplier has to demonstrate the ability to establish, document and implement an

effective quality system that complies with all applicable elements of ISO/TS16949-2002

standards. Apart from this suppliers management has to ensure that supplier quality

policy is understood and maintained, and continuous improvement of the quality system

is followed.


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2.2 Quality System Development and Audits

Tata Motors may require a formal assessment of the suppliers quality system at

any time. The type of audit done is based on the following requirements .

At the suppliers and/or customers request to provide guidance for

verification of quality system improvements

Supplier does not meet acceptable standards of performance

Potential or Strategic Supplier to Tata Motors.

Manufacturing of new type of item

Periodic quality audit

2.3 Quality Planning

The purpose of having a quality plan is to set direction, action plans and measurements

needed to accomplish stated objectives and plans. To meet the objectives of the

development suppliers us To this end, suppliers shall use some form of systematic

planning and review for new products and product changes. APQP is the minimum

acceptable route for this purpose. Quality development and control activities require

planning to be effective and economical. The quality planning process shall emphasize

problem prevention rather than detection, and support a continual quality improvementphilosophy. This results into increased productivity, efficiency and profits by reducing

waste, scrap, rework and customer complaints when quality planning is properly

performed. Tata Motors requires that its suppliers plan for quality. Supplier may refer to

Tata Motors PPAP process for additional information (Details of PPAP enclosed in

Appendices). The quality planning activity shall be a regularly scheduled, cross-

functional process, involving all departments with goals and objectives supporting the

quality system. Each supplier is responsible for the quality of its own products. The

suppliers failure to provide Tata Motors with quality goods may result in Tata Motors

claims for machining, assembly, sorting and/or administrative costs due to poor quality,

late delivery and other nonconforming conditions.

The quality planning methods and documentation are suggested as per list of PPAP

requirement.


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2.4 Production Part Approval Process (PPAP)

Suppliers shall fully comply with all requirements of Production Part Approval

Process when doing business with Tata Motors. Before making a shipment to

Tata Motors, the supplier shall meet all of the purchase order requirements and

shall ensure that all parts conform to Tata Motors engineering and quality

specifications. This includes the submission of PPAP for conditions/ situations

listed in Tata Motors PPAP process and as mentioned below, unless it is waived.

.

All Tata Motors suppliers are required to submit a PPAP in case of Major /

Significant process changes.

2.4.1 PPAP Submissions / Retentions and records.

Suppliers are responsible for retaining a complete record of all PPAP

submissions. The records shall show conformance to all dimensional, chemical,

metallurgical, physical, performance and other test specifications. Please refer

PPAP process of Tata Motors.

Suppliers shall have a system to control the updating, distribution, storage and

disposal of engineering drawings, specifications, control plans, FMEAs,

procedures, work instructions, forms, etc.

2.4.2 PPAP Status

The following dispositions will be used: Accept

Reject - The supplier must correct and resubmit the PPAP package. Only

those characteristics affected by the changes to the tooling and/or process

need to be addressed in the resubmission. If the PPAP was rejected

because of missing documentation, the documentation must be included

with the resubmission. The supplier must not ship production quantities

while the status of the PPAP is "Reject" unless a deviation is granted for

all characteristics contributing to the rejection. If the suppliers PPAP is

rejected, the product shall be corrected and PPAP resubmitted for

approval.

Other- This status may be applied to product that has been accepted for

all dimensional and material requirements, but will require subsequent


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manufacturing evaluation to determine acceptability. When a PPAP

receives this disposition, the supplier is required to submit a small

production lot of product for evaluation. Accept status is granted if no

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product-related problems are encountered during testing. If problems are

encountered, the status becomes Reject and the supplier must resubmit

based on the feedback they are given.

After PPAP approval has been granted, suppliers are responsible for seeing that

future production continues to meet all customer requirements.

2. 4. 3 Out-of-tolerance Conditions on PPAP Samples

The supplier shall make every reasonable effort to correct any discrepancies

discovered when parts are being evaluated for a PPAP. If, for any reason, the

samples inspected for the PPAP do not conform to all requirements and the

supplier is unable to correct the discrepancy, the supplier must notify the

appropriate Tata Motors contact prior to submitting the PPAP. This will allow for

remediation if needed.

2. 4. 4 Ongoing PPAP Maintenance

The supplier shall carry out audit for product and process at regular intervals

(including complete dimensional, material and performance evaluation) as a part

of internal control and corrective action plan to be implemented wherever

necessary.

2.5 Subcontracted Parts and Services

If a part or service is subcontracted by a primary supplier, the primary supplier

assumes responsibility for the quality of that part or service unless Tata Motors

specifically releases the supplier from that responsibility in writing. Materials

purchased by Tata Motors and consigned to a primary supplier are not

considered subcontracted. The primary supplier is responsible for the quality of

all subcontracted materials, components or services. Parts or services cannot be

subcontracted without prior consent from a Tata Motors representative in writing.

Any materials, components or services purchased by the supplier for use in Tata

Motors products must be adequately inspected and/or tested to assure

conformance to the applicable engineering drawings and specifications. This


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applies whether the materials/components are Tata Motors designed or are

specified by reference to a particular industry specification or manufacturer's part

number.

Whenever the primary supplier subcontracts a service (e.g., heat treating,

machining, assembly, inspection), it must assure that the results conform to all

applicable specifications. Any characteristics produced or affected by

subcontracted services are to be treated in the same manner as on Tata Motors

designed materials components.

For materials or components that are Tata Motors -specified, but do not have

dimensional, physical, material or aesthetic characteristics specifically indicated

(such as off-the-shelf or catalog items), the supplier must provide the sub

suppliers name and address and the part number and/or name of the

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subcontracted item with the PPAP documentation. Whenever specified by Tata

Motors, only Tata Motors -approved sources may be used for supplier-procured

subcomponents.

2.6 Special Characteristics

Some Tata Motors products will have features, which are designated as Special

(key, significant, critical, etc.) characteristics on the drawing. When a special

characteristic is shown on a drawing, the supplier shall comply with the

description. It is the suppliers responsibility to understand all special

characteristics on the part drawing, and to notify the division-purchasing

associate when more information is required.

2.7 Material Certifications

The supplier shall ensure that the product supplied to Tata Motors is in

compliance with all material specifications on the product drawing and/or

purchase order. Material certifications containing actual measured results are

required at PPAP and during normal production on an as needed basis, as

designated by Tata Motors.

2.8 Restricted Substances

Tata Motors is concerned for the safety of its employees, customers and society

at large. Suppliers must assure compliance with all governmental and safety


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requirements on restricted, toxic and hazardous substances used in the

manufacture of products delivered to us. When applicable, Material Safety Data

Sheets are to be sent to the attention of the Environmental Health and Safety

Officer at the Tata Motors prior to the first production shipment and upon request.

Suppliers are required to report any hazardous materials contained in any part of

the product shipped (including coatings, etc) to Tata Motors . (Refer annexure for

restricted substances)

2.9 Statistical and Analytical Techniques

Statistical and analytical techniques may be used by the supplier to measure and

improve process capability, efficiency, and quality of the product. Supplier may

use various types techniques like Design of experiment, X bar & R chart etc.

The supplier must develop a system which documents responsibilities,

involvement, plans and criteria for implementing statistical and analytical

methods. The supplier is responsible for ensuring that tooling, equipment, and

processes used to demonstrate the capability to consistently produce quality

parts with minimum variation. The special characteristics identified on customer

prints will require a minimum of 1.33 CpK. All critical and major dimensions on

the drawing shall demonstrate statistical process control at time of PPAP.

2.10 Internal Supplier Product/Process Audits

The supplier shall have an internal process for the routine audit of product and

process quality. The supplier shall perform internal quality audits scheduled on a

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regular basis to set a benchmark for continual improvement of their quality

systems and to demonstrate compliance with existing elements of this manual.

The results of the internal audits shall be distributed to the appropriate personnel;

action plans shall be developed, tracked and documented for all areas that are

found to be in noncompliance.

The objectives are to:

Assess the effectiveness of the control plan in assuring conformance to

the requirements.

To evaluate as delivered product quality.

To provide a basis for the improvement of the control plans.


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To provide additional assurance of product quality.

Assessments of dimensional, functional and/or cosmetic features may be

required to adequately evaluate the part or process to Tata Motors requirements.

2.11 Calibration

The supplier shall establish a calibration system that will track and account for

each gauge and measuring instrument individually. Established calibration

intervals shall be documented, and each instrument shall be traceable to its last

calibration date. Documentation shall include the actual quantitative

measurements taken during the calibration, in order to monitor long term

performance. All gauges used in evaluating process potential shall be in

compliance with Quality System requirements. Copies of the Gauge R&R study

data and results must accompany the process potential study information.

All calibration must be traceable to National Laboratory or an industry recognized

standards/accreditation authority. Outside calibration services must be accredited

to ISO/ IEC17025. These calibration records shall be retained for verification

purposes. Employees involved in using calibration equipment should have

documented training on the instruments they use. Documentation of training

records shall be retained for verification purposes.

2.12 Gauge R&R

The supplier shall conduct Gauge R&R studies upon receipt of new or repaired

measuring equipment. Documented action plans shall be completed for

completion of Gauge R&R studies on existing equipment. After the initial studies,

established intervals for repeat verification, Gauge R&R studies shall be

documented, traceable to the last date of evaluation, and include all significant

study information. These repeat studies are necessary on a regular basis to

assure continued suitability to the application. Gauge R&R studies shall be

conducted under actual operating conditions. Gauge R&R studies shall be

included with each PPAP package.

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Guide lines for acceptance of Gauge R & R

If GRR as a % of tolerance is 0-20% , it is acceptable for measuringCritical , Major and Minor characteristics


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If GRR as a % of tolerance is 20-30% , it is acceptable for measuring ,Major and Minor characteristics only.

If GRR as a % of tolerance is greater than 30% , it is not acceptable formeasuring any type of characteristics and measurement system

should be improved

2.13 Notification of and Control of Nonconforming Material

All suspect material shall be properly contained at the suppliers facility. All

suspect nonconforming material shall be quarantined in a segregated area,

designated for that purpose only. An effective system is required for proper

identification and timely disposition of nonconforming material. The supplier is

responsible for maintaining and analyzing data for those non-conformances.

Supplier shall take necessary action to avoid shipment of such material to Tata

Motors. If such material is shipped to Tata Motors, Supplier shall be responsible

for all the liabilities arising due to this. Suspect material (material whose

inspection/test status is not known) and obsolete material shall be treated at par

with Non-conforming material.

2.14 Preventive/Corrective Action and Problem Resolution

The supplier shall establish systems to document and track corrective actions.

Corrective actions could be referred to as Non-conforming Material Reports

(NCMRs), Corrective Action Reports or Defective Material Reports. Results must

be traceable to the initial reason for the corrective action request. The format

used must drive towards root cause analysis and implementation and

effectiveness of permanent action to eliminate the problem and the possibility for

recurrence. Analysis of actions taken and results shall verify the effectiveness of

the solution.

If containment is needed, it shall include:

Method of containment,

How new product is identified, and

Containment plan for product in transit or at Tata Motors.

The permanent corrective action or an action plan shall be issued to the Tata

Motors within 7 working days of notification of the occurrence.

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This shall include:

Root Cause analysis,

Verification of corrective action, and

Dates and Responsibilities for actions not complete.

All corrective action responses are to be closed out in a timely and

expeditious manner, with a maximum target closure date of thirty days.

Corrective action requiring more than 30 days requires written approval

from Tata Motors.

To end this, the suppliers system shall contain a mechanism for escalating

unresolved problems to the suppliers executive management to ensure action is

taken and to enable an understanding of any strategic implications.

The supplier shall develop a method for assessing the responsiveness and

effectiveness of their problem resolution process.

During specific instances Tata Motors supplier may be requested to attend a

Quality meeting. A targeted supplier may be one with a high PPM or one with

chronic repetitiveness of bad quality.

2.15 Traceability

Unless otherwise agreed to, the supplier shall maintain the ability to trace their

product from the lot identification as shipped to Tata Motors, back through theirmanufacturing system to the raw material source.

2.16 Manufacturing Capabilities

Suppliers shall establish systems and procedures, which seek to continually

optimize the efficiency and productivity of its manufacturing capabilities. These

efforts are directed at such activities as minimization of floor space, inventory,

cycle time, manpower, and use of other resources in all aspects of the

manufacturing process. Suppliers shall ensure that cross-functional teams are

established to develop methods to optimize process effectiveness using Kaizen,

mistake proofing, and/or other proven methods. Objective evidence of these

methods must be evidenced during the Preventive and Corrective Action stage of

the process.

2.17 Specific Requirements

In many cases, this manual will not sufficiently describe all of the specific


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requirements of Tata Motors or particular customer. The Tata Motors specific

requirements shall be identified during the Advanced Product Quality Planning

(APQP) activities. If there are any questions regarding these specific

requirements, the supplier shall contact the respective Purchasing Department of

Tata Motors.

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Product-specific requirements may include but not be limited to the following:

Special characteristics.

Testing.

Special handling.

Customer-specific requirements may include but not be limited to the following:

Quality management systems.

Process techniques and process controls.

Identification and processing of critical parts and features.

Certification.

2.18 Economic-Considerations of Quality-Related Costs

The suppliers management shall define and document a comprehensive quality

cost management system and facilitate quality improvement efforts that will lead

to operating cost reduction opportunities. Tata Motors believes that when quality

costs can be measured and related to an area where basic quality performance

data exists, the quality improvement process can begin.

An effective quality cost program consists of the following steps:

Establish a quality cost measurement system.

Develop a suitable long-range trend analysis.

Establish annual improvement goals for total quality costs.

Develop short-range trend analysis with individual targets, which

collectively add up to the incremental demands of the annual improvement

goal.

Monitor progress against each short-range target and take appropriate corrective

action when targets are not being achieved.

2.19 Product Safety and Product Liability

The safety aspects of product quality shall be identified with the aim of enhancing


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product safety and minimizing the potential consequences of product liability. The

company and its employees must be aware of its potential consequences.

2.20 Housekeeping

The supplier shall have a documented system to ensure their facility is clean and

orderly. This verification shall be a part of their internal quality audits. Tata

Motors strongly feels that a supplier with an effective Housekeeping process

allows itself to present well to its customers and employees

2.21 Tooling Management

The supplier shall establish and implement a system for tool control. This

includes items manufactured from stampings, injection molding, template

cutouts, etc. Formal procedures addressing tooling handling, storage,

modification, setup, design, preventive maintenance and calibration shall be

maintained and shall be followed. All tooling purchased, loaned or financed by

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Tata Motors shall remain the property of Tata Motors. Normal storage,

maintenance, repair and calibration of own and Tata Motors tooling, unless

otherwise negotiated, is the responsibility of the supplier, such as expected tool

life will be achieved and conforming parts are produced.

2.22 Control of Special Process

The supplier must have an approved system in place to validate, revalidate and

to perform special processes such as a) Plating, b)Heat treating, c) Welding, d)

Surface finish / coating / treatment (painting and plating), and others that require

approval certification of the process equipment and procedures. Please refer to

Appendices for the list of current sources approved by Tata Motors for special

processes. Supplier shall take approval for a new sub contractor for special

processes from Tata Motors before starting the development. The requirements

for any qualification of process operations, including associated personnel and

equipment shall be documented.

2.23 Inventory Age Control

The supplier shall have an effective system for age control within their inventory

for items whose acceptability is limited by age of the item. The system must

include a method of identifying the age of such items and provision for the


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in the supply chain. Cost reduction proposals may include ideas, which involve

but are not limited to:

Component Design

Material Type

Packaging Requirements

Logistics

Process Standards

Cycle Time Reduction

Workplace Organization

Value Analysis/Value Engineering

Validation Test Requirements

Certification Methods

3.3 Cost Control and Reduction

The supplier shall have a process that ensures:

All costs are controlled during the life of the products.

All potential cost reduction opportunities are clearly identified.

As part of this process, the supplier shall establish and maintain documented

records of all criteria that may influence the cost of their products. This

information shall primarily be used to manage and control cost, and to ensure theimpact of economic factors and market fluctuations are minimized. This

information shall also be used to highlight opportunities for cost improvement.

The supplier shall compile and maintain a document of continual

improvement/cost reduction ideas for submission to the customer. The continual

improvement ideas shall be frequently reviewed with the appropriate purchasing

agency to maximize the effect of potential cost improvements.

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3.4 Commercial Agreements

General RequirementThe supplier must comply with Tata Motors standard Purchase Order terms and

conditions. The suppliers must sign the Purchasing Agreement with Tata Motors

and should follow the same during the entire contract period of Purchase Orders.

3.5 Warranty

The supplier shall commit to the terms and conditions of warranty in the


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Purchase Order / Purchasing Agreement.

3.6 Non-Conforming Materials

Non Conforming Materials affect the quality of final products, and hence the

suppliers shall ensure that these are not getting mixed with their normal supplies

.Non Conforming Material Report (NCMR) may also be referred to as a rejection

report.

Tata Motors may recover an administration fee for each non conforming material.

A late charge will be issued if an initial response is not received within

appropriate time of notification of an NCMR. Suppliers are requested to

communicate the same to QA and Purchasing Agency.

A late charge will be issued if a permanent corrective action or an action plan

showing responsibilities and due dates is not received within 7 working days of

notification of the occurrence. Suppliers are requested to communicate the same

to QA and Purchasing Agency.

Any and all costs related to the NCMR incurred by a Tata Motors facility will also

be charged back to the supplier. These costs may include:

Down time

Sorting

Scrap Supervision

Rework

Premium Freight

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Section 4 : Delivery4.1 Logistics PlanningGeneral Requirements

The supplier shall ensure that logistics development activities are planned for

and carried out at an appropriate stage in a products development & life cycle.

All logistic planning and development activities shall be carried out according to

the requirements of Tata Motors.

Delivery requirements:

100% On Time delivery is requiredIf a supplier does not meet our 100% target,

the supplier may be requested to provide action plans to address the causes.


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On-time delivery must contain the complete quantity of parts scheduled and meet

specification.

Any cost incurred due to late delivery will be charged back to the supplier. This

includes:

Late PPAP submissions

Late/missing/incorrect documentation

Any extra cost, associated with a suppliers lack of meeting Tata Motors delivery

and quality requirements will be debited back to the supplier. This cost would

include premium freight, machine downtime, etc.

Suppliers should track all premium freight within their system as a quality

requirement. Tata Motors requires suppliers to be SRM compliant. The supplier

shall identify personnel responsible for the support of product delivery to the Tata

Motors during all hours of operation. This information should be provided to your

Tata Motors contact.

4.2 Design for Logistics

The supplier shall ensure that logistics issues are given due consideration, at an

appropriate stage of product development, to enable the following:

Optimal design to reduce packaging complexity.

Optimal design to improve ease of handling. Optimal design to reduce the likelihood of product damage.

Damage to environment.

Tata Motors encourages use of recyclable cartoon boxes.

4.3 Delivery Process

The supplier shall develop a delivery plan that identifies the most appropriate

process for the delivery of their product to support a daily production requirement

at Tata Motors. In doing so, the supplier should consider the following:

Supply routing for transportation.

Warehousing (size, storage specifications, shelf life).

Any requirement for sequenced delivery product Traceability.

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Where transportation is provided by Tata Motors (Milk route suppliers), the

supplier must ensure that products, together with an appropriate means of


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loading, are available at the required times.

Where transportation is the responsibility of the supplier:

The supplier shall have an effective transportation policy. The policy shall

be regularly reviewed for cost effectiveness and success in meeting

customer requirements.

The supplier shall measure transportation performance for identifying

further opportunities for delivery performance improvement.

The supplier should ensure that a deviation form accompanies any

material that is not to specification.

The supplier shall have a process for the measurement and review of

logistics management performance. This review should be conducted at

the executive level of the organization.

4.4 Supply Chain Flexibility

Externally, the supplier shall complete an analysis of the effectiveness of the

planned supply chain and its associated processes for each commodity at the

suppliers manufacturing site. Each supplier shall be responsible for managing

its own supply chain. Internally, the supplier shall identify any constraints that

prevent a free supply of components and assemblies through the manufacturing

process. Areas of inflexibility shall be investigated so that they can be eliminatedor managed. Details of flexibility must be made available to the Tata Motors on

request.

4.5 Labeling Standards

Suppliers shall ensure to attach identification tag on all consignments supplied to

Tata Motors giving complete details. Any deviations from the requested standard

must be provided in writing from the Tata Motors location receiving product.

4.6 Premium Freight

The supplier will be held liable for additional freight cost incurred because ofsuppliers lack of quality and delivery performance. Any premium freight

incidences and their cost must be tracked at the suppliers location as a quality

requirement.


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Section 5 : Support5.1 Risk Assessment

The supplier must have a process for the identification and management of

potential risks to ensure proper supply of parts and materials to Tata Motors. The

intent of this process is to proactively address contingencies and risk. The

supplier shall inform Tata Motors about the action plan to encounter the

contingencies and risk.

The suppliers Risk Assessment process shall include a periodic assessment and

review of all possible risks. The process shall analyze risks associated with both

facilities and personnel, considering issues such as:

Product, facility or individual skill uniqueness.

Critical process element susceptibility to disruptive damage.

Susceptibility to natural phenomena (i.e. flood and earthquake).

Labor Unrest

Second tier supplier related issues.

Hazardous Material Reporting (i.e. End of Vehicle Life requirements,

Cadmium, Mercury, Hexavalent Chromium).

Change in legislation, which may affect the Suppliers business or QMS.

The output of this assessment shall be used to identify where action is required,

if economically feasible, to remove or reduce the likelihood of these problems

occurring. The assessment shall also include an estimation of potential downtime

in a major catastrophe. The supplier shall inform Tata Motors about occurrence

of such incidence and work-out a joint action plan.

5.2 Continual Improvement

The supplier shall demonstrate the effective deployment of a comprehensive

continual improvement plan across the whole organization. The objective of

continual improvement is to deliver real improvements in customer satisfaction

and business performance, thus maintaining and strengthening the

organizations competitive advantage, and that of the whole supply chain.

The supplier shall ensure that continual improvement activities are focused on

those businesses and manufacturing processes that have the greatest influence


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improvement and work out action plans for improvement in the performance of

the Supplier. The Suppliers shall also be ranked according to their scores in

rating according to the system. While high performing Suppliers shall be given

preferred treatment regarding new developments, those showing no

improvements despite efforts may be considered for deselection.

The Supplier can access the feed back through our network, SRM being

provided to the approved vendors free of any charge. For any queries, the

Supplier is to contact the related Development, Purchasing agency or Quality

Assurance Division.

Rating System Profile :

Following are the details of Tata Motors Supplier Rating System:

The system has been configured in our ERP system, SAP 4.6c.

Suppliers are rated on the overall scale of 1 to 100 in this comprehensive

system. The supplies of the items under development are excluded from the

scope to avoid influence of iterations during development.

The overall score is arrived at by aggregation of the scores on five Main Criteria:

1 Quality

2 Price

3 Delivery4 Design and Development Capability

5 Management Systems

Each of these Main Criteria has the scale of 1 to 100 .

Current weightage to each of these Main Criteria is :

1 Quality 50%

2 Price 20%

3 Delivery 20%

4 Design and Development 5%

5 Management System 5%

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Tata Motors may revise the weightage of these Main criteria according the

relative importance of the same to Tata Motors from time to time .


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Each of these Main Criteria has been further drilled down in to constituent sub

criteria elements. While the scores on these sub criteria are mainly arrived at

through transactional details of the supplies made by the Supplier through the

system, officers from the related development / purchasing / quality assurance

divisions allot scores to the Suppliers on others.

Sub Criteria and their weightages and method of scoring are as follows:

Quality :Parameter Vendors with WarrantyImpact (Proprietary)Vendors with no WarrantyImpact (Sheetmetal,machining)Incoming inspection 10 10

Line rejection 25 35Audit - 10Quality systema) Quality certification 10 10b) Audit at vendor 15 15Warranty 30 -PPM* 10 20

PPM PPM score

Below 200 100

201 -500 75

501-1000 50

1001 & Above 1Price :

1Price Level 70% Through system

2Price Behavior 30% Through system based on the

price revisions

Delivery:

Till MRP functionality in SAP goes live , this score shall be updated by

concerned officers .

1 On time Delivery 70%

2 Quantity Reliability 30%

Design and Development Effort: 5% Updated by concerned officers

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Management System 5% Updated by concerned officers

Currently the frequency of the feed back to the Suppliers through this system is


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once every quarter.

Sample of the Supplier Rating System:

If Supplier scores as follows:

1 Quality : 90

2 Price: 80

3 Delivery: 80

4 Design and Development: 60

5 Management System 80

Then the overall score is worked out by taking the weighted average as follows :

Overall score ={ Sum of the (Weightage of the Main Criteria * Score for that Main

Criterion) }.

Overall Score in the example ={ ( 0.5*90 ) + ( 0.2*80 ) + (0.2*80 )+ (0.05*60 ) + (

0.05*80 ) } = 83 .

development of automotive components

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