SHRIKRISHNA PAWAR PROJECT REPORT

APROJECT REPORT

ON

“SUPPLIER QUALITY RATING”

UNDERTAKEN FOR

VARROC ENGG PVT LTD.,AURANGABAD

IN PARTIAL FULFILMENT OFMASTERS OF BUSINESS ADMINISTRATION

UNIVERSITY OF PUNE

SUBMITTED BYSHRIKRISHNA B. PAWAR

JSPM’sABACUS INSTITUTE OF COMPUTER APPLICATIONS

PUNE-411028

YEAR 2008-2009

1

DECLARATION

I, the undersigned, hereby declare that the Project Report entitled “SUPPLIER QUALITY RATING” written

and submitted by me to the University of Pune, in partial fulfillment of the requirement for the award of degree

of Master of Business Administration is my original work and the conclusions drawn therein are based on the

material collected by myself.

SHRIKRISHNA B. PAWAR

2

ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere thanks and gratitude to

Mr. Santosh Todarwal and Mr. Sandip Chopda, Varroc Group, Aurangabad for giving me an opportunity

to do my summer training in the esteem organization and it has indeed been a great learning and enjoyable

experience.

I would like to express my deep sense of gratitude and profound thanks to all staff members of Varroc Engg

Pvt. Ltd, Plant II, Aurangabad for their kind support and cooperation which helped me in gaining lots of

knowledge and experience to do my project work successfully.

I would like to acknowledge my sincere gratitude to The Director of my institute Dr.Sagar Jambholkar for

helping me in this project.

At last but not least, I am thankful to my Family and Friends for their moral support, endurance and

encouragement during the course of the project.

SHRIKRISHNA B. PAWAR

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CONTENT

Sr. no. Topicpage no.

  ACKNOWLEDGEMENT    EXECUTIVE SUMMARY       1 Chapter 1: INTRODUCTION  1. A Concept & context of the study  1. B Objectives of the study  1. C Scope & limitation of the study       

2Chapter 2: PROFILE OF THE ORGANISATION  

2. A Name, Address & Location of company  2. B Vision & Mission  2. C Historical background  2. D Organizational chart  2. E Product profile of company  2. F Awards       

3Chapter 3: RESEARCH DESIGN & METHODOLOGY  

3. A Sources of data collection  3. B Sample Description       4 Chapter 4: CONCEPTUAL BACKGROUND  4. A Theoretical Background  4. B Conceptual description of topic       

5Chapter 5: DATA PRESENTATION & ANALYSIS  

     6 Chapter 6: FINDINGS & CONCLUSION         BIBLIOGRAPHY    ANNEXURE  

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EXECUTIVE SUMMARY

“Tree cannot touch the skies, but certainly can have branches.” Varroc Group too believes in this axiom, and

has strong footholds in Polymer, Electrical, and Metallic Divisions and exists in all important auras of

Automobile sector.

Now, Varroc Group has ventured into the field of automotive components & sub assemblies of 2, 3, and 4

wheeler in domestic and overseas market with an objective to become the preferred quality supplier across the

globe.

To survive and achieve success, any ventures need to understand the dynamics of competition in their industries

and develop skills and capabilities that give them a competitive advantage. This is especially true among

automotive industries. Customer do not buy only products as such, they buy satisfaction, hence organization

must be clear about the satisfaction the customer is seeking and check out whether supplier is also meeting the

standard as per concern of quality, delivery & service provided so that proper improvement is achieved

throughout the supply chain.

This report is based on above mentioned problems i.e. quality standards of existing suppliers. This report is

broken down into four main parts, first its deals with the introduction and the scope of the research, second

explains the profile of the Varroc Group followed by process or methodology adopted under the research

methodology and the review of literature and finally concluding by analyzing the collected data.

The work environment of Varroc group was absolutely encouraging and full of support. During my training, on

one hand I learned much about Varroc, their work culture, on other hand I got the knowledge of supply chain

management.

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CHAPTER – 1

INTRODUCTION

6

OBJECTIVES OF THE STUDY

1. To learn how assessment technique can help in enhancing decision making in materials management.

2. To equip with the required depth & balance of technical & managerial competencies to handle supplier

quality issues successfully.

3. To develop familiarity & competence with the supplier quality audit techniques.

4. To analyze the supplier quality audit to assess the supplier quality rating.

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SCOPE OF RESEARCH

After completing this project, the researcher will get knowledge about today’s challenging supply chain

management. Since this project is a part of researcher’s course curriculum so it is essential for researcher for

completing “Masters of Business Administration” degree which will help researcher in building his career. It

will also increase researcher’s confidence level so that he will be able to adjust himself in such kind of esteemed

organization. This research study will help the company to know about the existing supplier quality rating. This

study will also help the company to determine the strategy about supplier quality up gradation.

LIMITATIONS

Stipulated time period is the main limitation of the study project.

It was very difficult to get the suitable data as supplier is scattered.

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CHAPTER – 2

ORGANIZATIONAL PROFILE

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NAME AND ADDRESS OF ORGANIZATION

Varroc Engineering Pvt. Ltd.,

VEPL-II, K-101-102,

MIDC Industrial Area, Waluj,

Dist.Aurangabad-431 136

Maharashtra, India

CORE VALUES OF ORGANIZATION

We are committed to making Varroc a leader in the industry & ensuring that varroc is always the first & most

trusted choice for its customers.

We plan to achieve this by practicing,

SINCERITY:

To go the distance

In carrying out roles & responsibilities transparently

In expression of thoughts & feelings

In concern for the team & the company

HUMILITY:

To walk with everyone

By showing respect for others

By sharing success & achievements

By being open & positive

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INTEGRITY:

To do what is right

To inculcate a culture of healthy competition

To have no tolerance for unethical practices

To adhere to commitments

PASSION:

To achieve against all odds

To proactively participate in the organization

To bring about innovation in all work

To remain motivated against all odds

SELF DISCIPLINE:

To make it happen

To take ownership for your actions

To be consistent & dependable at all times

To learn & improve everyday

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VALUED CUSTOMERS

VARROC GROUP : OVERVIEW

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VARROC GROUP

HISTORICAL BACKGROUND

“POLYMER DIVISION”

1990 - Establishment of ‘polymer division’ from Waluj, Aurangabad.

1995 - Varroc successfully introduced ‘rubber moulding process.’

1995 – ‘Mouldcraft Hindustan Pvt. Ltd.,’ (MHPL) set up as joint venture with Videocon.

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Varroc Engg Pvt Ltd. Varroc Polymer Pvt Ltd.

Electrical Division Metallic Division

VEPL I

VEPL II

VEPL III

DIPLVEPL VI

VEPL IV Subsidiaries

VEPL PN

VEPL VII

VEPL V

VESPL

IMES Poland

IMES Italy

VPPL II

VPPL III

VPPL IV

VPPL GN

VPPL BN

Subsidiaries

Varroc Elastomers

VPPL I

1996 – ‘Foam moulding process’ introduced by varroc group.

1998 – ‘Mouldcraft Hindustan Pvt. Ltd.,’ (MHPL) introduced ‘sheet extrusion process.’

1999 – New plant set up at Takve in Pune specializing in ‘plastic moulding process’.

2001 – ‘Mirror plant’ operations started at Takve in Pune.

2002 – Varroc Polymer Pvt. Ltd., Greater Noida (VPPL-GN) was set up with specialization in ‘Gas assisted

Injection moulding process’

2003 – ‘Paint shop’ started its operation from plant I.

2003 – ‘Air cleaner assembly’ production for 2 wheeler of Bajaj Auto Ltd.

2004 – Establishment of ‘Technology Development Center’ (TDC) for Bajaj 2 wheeler business.

2004 – VPPL-GN received ‘Best Partners Excellence Award (2004)’ from LG Electronics.

2004 – VPPL-GN won prestigious ‘Excellent Vendor Award (2004)’ from LG Electronics

2005 - Varroc Polymer Pvt. Ltd., Binola (VPPL-BN) was commissioned with specialization in 'Moulding

process’ at Binola in Haryana.

2006 – Shifting of ‘Mirror plant’ at Ranjangaon in Pune i.e. Plant II.

2006 – Increase in the domain of expertise of ‘Technology Development Center’ (TDC) by

kkkkkkincorporating activities integral to 4 wheeler business.

2007 – ‘Expansion of Varroc Polymer Pvt. Ltd., Plant II’ (VPPL - II) at Ranjangaon in Pune to cater the ‘four

wheeler business.’

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2008 – ‘Hot and cold Injection process’ introduced at VPPL Plant II at Ranjangaon in Pune.

2008 - Varroc Polymer Pvt. Ltd., Binola (VPPL-BN) won Achievement Award (2008) for meeting quality and

delivery targets by Honda Motorcycle and Scooter India (P) Ltd.

2008 - Varroc Polymer Pvt. Ltd., Greater Noida (VPPL-GN) added another feather in its cap by winning

Excellence Award (2008) in Q, C, and D in Mold Category from LG Electronics.

ORGANIZATIONAL CHART

“VENDOR DEVELOPMENT: POLYMER DIVISION”

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DEPARTMENT HEADCorporate Material (Polymer Division)

DEPARTMENT HEADVendor Development

PRODUCT PROFILE

Varroc Group has adopted the TPM system to ensure continuous improvement and sustenance of the quality of

the products. All divisions manufacture precision high quality parts for the automobile industry.

1. POLYMER DIVISION:

Interior Pillar Trims, Door Panels, Floor Console

Exterior Parts – Bumpers, Fenders, Claddings, Wheel Arches

Underbody/ HVAC parts

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AM MaterialVendor Development

Sr. OfficerVendor Development

EngineerVendor Development

EngineerVendor Development

Injection and Compression Molded Rubber Parts

Mirror Assemblies and Mirror Rubber Parts

Air Cleaner Assembly

PU Foam Pad and Seating System Assembly

Multilayer co-extruded Thermoplastic Sheets

Molded parts for White Goods and Consumer Electronic Parts

Series Molds and Pre Production Molds

2. METALLIC DIVISION:

Engine Valves

Crank pins for motorcycle

Hot, cold & warm forged machined components

Catalytic converters for 2, 3 and 4 wheelers

3. ELECTRICAL DIVISION:

A.C. generator & Magneto

Digital CDI, digital regulator rectifier units

Starter Motor, Wiper Motor

Switch Assembly and handle bar assembly for motorcycle, LED Lights

Electronic control units, Electronic Clusters

AWARDS & ACHIEVEMENTS

Excellence and perfection are the key stones of Varroc manufacturing philosophy. Varroc emphasis on Quality

Systems and insistence on process reliability ensures that products not only meet customer requirements in

every respect, but also satisfy the international norms of product excellence. The passion is reflected in the

excellence of work, for which varroc received a lot of appreciation from the clients and even some awards. With

these achievements, Varroc group has proud feeling that, ‘this is just a beginning, and our best is yet to come.’

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VPPL-GN:

Best Partners Excellence Award (2004) from LG Electronics

Excellent Vendor Award (2004) from LG Electronics

Excellence Award (2008) in Q, C, D, in Mold Category from LG Electronics

VEPL-IV:

BAL- Silver Quality Award (2007)

BAL- TPM Award (2007)

ACMA–Gold Award (2008) in SME category for Excellence in Quality and Productivity

DIPL:

Indian Manufacturing Excellence Award (Gold) in 2007 out of 85 competing companies. It was

sponsored by Frost and Sullivan

Best Kaizen Award (2008) by bagging the first position and winning Rs. 1, 00, 000/- after beating

Bharat Forge, Tata Motors, Mahindra and Mahindra, Maruti Udyog etc. This event was sponsored by

Sona Koyo.

VPPL-BN:

Achievement Award (2008) for meeting quality and delivery targets by Honda Motorcycle and Scooter

India (P) Ltd.

VPPL-I:

Best Supplier of the year 2006 - 2007 for “Excellence in Quality" from Tata Johnson Control

Automotive Ltd.

VESPL:

BAL- Silver Quality Award (2007)

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CHAPTER – 4

RESEARCH DESIGN AND METHODOLOGY

RESEARCH METHODOLOGY

Redman and Mory define research as a, “systematized efforts to gain new knowledge”

Research methodology is a way to systematically solve the research problem. Research methodology not only

includes research methods but also consider the logic behind the methods we use in the context of our research

study and explain why we are using a particular method or technique so that research results are capable of

being evaluated by researcher himself or others.

Type of Universe:20

Here, type of universe is finite universe, because we can count the number of sample units.

Sampling Unit:

Here sampling units are existing suppliers of Varroc polymer pvt ltd.

Type of Sample Design:

It is a type of nonprobability sampling, it is also known as convenience sampling – under this sampling

design every item of the universe has an unequal chance of including in the sample. In this type of

nonprobability sampling, the sample being drawn from that part of the population which is close to hand. That

is, a sample population selected because it is readily available and convenient.

Method of Data collection:

Here, Method of Data collection is Questionnaire Method.

No of questions: 63 questions excluding profile.

Type of questions: Open & close ended questions

Primary and Secondary Data Sources:

The primary source of information was supplier quality audit reports. Supplier quality assessment is carried out

by Audit team to assess the quality of the supplier so as to determine the supplier quality rating.

The company’s website, Magazines, information provided by the vendor development team of Varroc

group were my secondary sources of information.

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CHAPTER – 4

CONCEPTUAL BACKGROUND

1. Theoretical Background

A. Supply Chain Management

B. Vendor Development

2. Conceptual description

A. Varroc Quality Policy

B. Supplier Quality Management

C. Supplier Quality audit

D. Supplier Quality Rating

E. Supplier Quality Rating Calculations

THEORETICAL BACKGROUND

A.1) SUPPLY CHAIN MANAGEMENT:

The definition, put forward by an American professional association, is that Supply Chain

Management encompasses the planning and management of all activities involved in sourcing, procurement,

conversion, and logistics management activities. It also includes the crucial components of coordination and

collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and

customers. In essence, Supply Chain Management integrates supply and demand management within and across

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companies. Supply Chain Management spans all movement and storage of raw materials, work-in-process

inventory, and finished goods from point of origin to point of consumption.

In the 21st century, changes in the business environment have contributed to the development of

supply chain networks. First, as an outcome of globalization and the proliferation of multinational companies,

joint ventures, strategic alliances and business partnerships, there were found to be significant success factors,

following the earlier "Just-In-Time", "Lean Manufacturing" and Second, technological changes, particularly the

dramatic fall in information communication costs, which are a significant component of transaction costs, have

led to changes in coordination among the members of the supply chain network.

A.2) SUPPLY CHAIN DECISIONS:

The decisions for supply chain management are classified into two broad categories - strategic and

operational. As the term implies, strategic decisions are made typically over a longer time horizon. These are

closely linked to the corporate strategy and guide supply chain policies from a design perspective. On the other

hand, operational decisions are short term, and focus on activities over a day-to-day basis. The effort in these

type of decisions is to effectively and efficiently manage the product flow in the "strategically" planned supply

chain.

There are four major decision areas in supply chain management as: 1) location, 2)

production, 3) inventory, and 4) transportation (distribution), and there are both dsgstrategic and operational

elements in each of these decision areas.

A.3) SUPPLY CHAIN MANAGEMENT APPROACH:

Supply chain management is a cross-function approach to manage the movement of raw materials

into an organization, certain aspects of the internal processing of materials into finished goods, and then the

movement of finished goods out of the organization toward the end-consumer. As organizations strive to focus

on core competencies and becoming more flexible, they have reduced their ownership of raw materials sources

and distribution channels. These functions are increasingly being outsourced to other entities that can perform

the activities better or more cost effectively. The effect is to increase the number of organizations involved in

satisfying customer demand, while reducing management control of daily logistics operations. Less control and

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more supply chain partners led to the creation of supply chain management concepts. The purpose of supply

chain management is to improve trust and collaboration among supply chain partners, thus improving inventory

visibility and improving inventory velocity.

B.1) VENDOR DEVELOPMENT:

Vendor development is one of the popular techniques of strategic sourcing, which improves the

value receive from suppliers. Vendor Development can be defined as any activity that a Buying Firm

undertakes to improve a Supplier's performance and capabilities to meet the Buying Firms' supply needs.

Traditionally one of the reasons for developing vendors is to build more competition in the supply

market so as to eliminating monopoly or oligopoly. The company can then buy a material from a number of

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sources. Another traditional reason for vendor development is to spread the risk of non availability or

shortage of input materials over a number of suppliers.

B.2) BEST PRACTICES IN VENDOR DEVELOPMENT:

Vendor development can be seen as an attempt to get the advantages of both spreading risk, building

competition and at same time establishing a good rapport. Vendor development involves helping or building

up the vendor by various means such as:

1. Providing technical help by making company engineers and technicians available to the vendor to

help him tide over the initial technical problems.

2. Guaranteeing vendor a certain amount of business, this is particularly needed during initial stages of

setting up the vendor.

3. Help in R&D, by again lending technical help to not only to establish the company, but also to help

improve its products and services on a continuous basis.

4. Lending money for part of his capital equipment, working capital requirements etc.

5. Working directly with Suppliers either through training or other activities etc.

6. AssessingeSuppliers'soperations.

B.2) BARRIERS TO VENDOR DEVELOPMENT:

Vendor development is one of the most powerful approaches that a firm can engage to achieve

the World-Class Supply Chain Management. The focus should be on developing vendor to become self-

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sufficient at Developing, Implementing and maintaining World-Class performance. There are many barriers

to effective supplier development, such as,

1. 1. Credibility of customers

2. Legal issues

3. Resource limitations

4. Poor communication and feedback

5. Complacency

6. Initiative fatigue

7. Lack of trust

8. Confidential issues

CONCEPTUAL DESCRIPTION

A. VARROC QUALITY POLICY:

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“We at Varroc group are committed to manufacture & deliver Quality products efficiently on time that

comply with customer & regulatory requirements & provide excellent service by continually improving

effectiveness of all processes, while striving to become a world class organization.”

B. SUPPLIER QUALITY MANAGEMENT:

Supplier quality management has emerged as one of the leading business practices in the past few years. World-

class manufacturers are making significant investments in systems and processes to improve supplier quality.

With companies outsourcing their manufacturing to strategic partners across the globe, the supply chains have

become very long. In addition, many of these manufacturers have streamlined their supply chain and

implemented lean inventory techniques. As a result, any issue in supplier quality can quickly result in stock

outs.

Businesses rely on suppliers to maintain their efficiencies.  Even a minor breakdown in the supply chain, or a

slight deviation from quality performance, can cost an organization valuable time and reduce profitability.

Companies that sell industrial products need to preserve their preferred supplier status to continue to be

considered for future business. As a result, they are under pressure to ensure that their products continue to meet

or exceed acceptable PPM and Corrective Action thresholds set by their customers. Hence, managing their own

supplier’s quality is very high on the agenda for these companies.

C. SUPPLIER QUALITY AUDIT:

All over the world organizations are under pressure to reduce production lead times & production costs.

These pressures have led companies to attempt to improve the efficiency of their internal processes by

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adopting new business practices like Total Productive Management, Just In Time, etc. But they have

now realized that isolated improvement in individual organization within larger system of

interdependent environment would not be enough to achieve their objectives. They have recognized the

need for better coordination with upstream firms that supply inputs and the network of downstream

firms responsible for the distribution of their products to the customers and after sales service. This has

resulted in the emergence of the concept of supplier up gradation.

Varroc expect suppliers to meet the same high standards which varroc set for themselves. In this rapidly

changing business environment greater demands are being placed on business to provide products

quickly with greater added value, to the correct location with least possible inventory levels. Customer

expects high quality, design, innovation, convenience & service at reduced cost. Supplier systems

assessments are done through audits to review suppliers’ quality management system, manufacturing

processes, material handling system & compliance with varroc requirements.

In this system, assessment identifies concerns, Varroc asks the suppliers to develop corrective action

plans & to provide evidence that they are implementing recommendations. Varroc help suppliers to

improve by sharing best practices & work with them to manage their suppliers, so that sustainable

improvements are achieved through out the supply chain. The key areas are identified and assessed in

the supplier quality audit. This assessment system includes:

Management

Finance & Accounts

Engineering

Quality control

Measurement control

In process control

Manufacturing process

Packing & dispatch

Abnormality control

Development

Stores

Purchase

D. SUPPLIER QUALITY RATING:

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A Supplier quality rating or vendor rating is a business term used to describe the process of measuring an

organization's supplier capabilities and performance. Supplier rating forms part of Varroc's supplier relationship

management. Such systems follow the criteria that are used for assessment broadly falls into quantative and

qualative types. Common criteria include:

1. Quality

2. Delivery schedule adherence

3. Cost/Price

4. Capability

5. Service

Results of each variable are then weighted into a final score – usually a percentage, allowing suppliers to be

ranked. Supplier rating is an ongoing activity, suppliers are assessed periodically. Various criteria can be

analyzed within supplier rating system. A common approach is to utilize Quality, service and Delivery

measures and apply weighting against criteria in accordance with company requirements.

Varroc then often categorized suppliers according to results which may commonly be used to highlight poor

performing suppliers so that they can be blocked from the business sharing. Supplier rating results may also

trigger improvement programs on suppliers that score low in supplier quality audits. Supplier ratings system is

utilized to drive performance and improve the business relation.

E. SUPPLIER RATING CALCULATION:

1. Quality rating (SQR):

It is one of the best techniques in using facts to rank the supplier’s relative performance within the

supply base and tracking improvement in supplier’s quality over the longer period of time.

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SQR= [ (Q1+X1.Q2+X2.Q3+Q4) / Q ] * 100

Where,

Q1 = Quantity accepted

Q2 = Quantity accepted under deviation

Q3 = Quantity partially accepted

Q4 = Quantity rejected

Q = Total quantity

X1 = Demerit factor (material accepted under deviation)

X2 = Demerit factor (material accepted with segregation)

2. Service rating (sr):

Service rating is subjective rating given on the basis of service provided in handling the customer

concern by the suppliers.

3. Delivery rating (SDR):

SDR= ( Q1 / Q ) * 100

Where,

Q1 = Quantity promised to supply within stipulated delivery time

Q = Actual quantity supplied

4. Supplier rating (SR):

SR = [ SQR * 85% + SDR * 10% + sr * 5% / 100 ]

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Where,

SQR = Supplier Quantity Rating

SDR = Supplier Delivery Rating

sr = Service Rating

5. Analytical weightage:

Weightage is applied against Quality, service and Delivery measures in accordance with company requirements.

SQR = 85%

SDR = 10%

sr = 5%

6. Supplier category:

Suppliers are categorized according to supplier rating results which are used to highlight poor

performing suppliers so that they can be blocked from the business sharing.

A = greater than or equal to 95%

B = less than 94.99% but more than or equal to 90%

C = less than 89.99% but more than or equal to 85%

D = less than 84.99%

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CHAPTER – 5

DATA PRESENTATION AND ANALYSIS

1. PLANTWISE SUPPLIER OF VARROC GROUP (POLYMER DIVISION)

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PLANT VPPL-I VPPL-II VPPL-III VPPL-IV VPPL-GN VPPL-BN

NO OF SUPPLIER 33 67 87 55 48 54

Interpretation:

Maximum number of suppliers is supplying the materials to Aurangabad region plants i.e. Plant-III &

Plant-IV.

2. QMS STATUS OF VARROC GROUP SUPPLIER (POLYMER DIVISION)

QMS

STATUSISO

ISO/

TSCERTIFIED

AUDIT PLAN

RECEIVEDBLOCK

NOT

REQUIREDPENDING

34

NO OF

SUPPLIE

R

114 52 19 17 13 13 5

Interpretation:

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Maximum numbers of suppliers of polymer division i.e. 48.92% are ISO certified.

VENDOR ASSESSMENT/ AUDIT REPORT  

INTRODUCTION

A

Vendor Name : Date of Audit :  

Vendor Code : Contact Person :  

Principal Auditor : Team Members : 

Previous Audit Date: Previous Audit Marks :

Marking Structure :

5- Supplier has a FULLY EFFECTIVE system in place to meet this requirement.

4- Supplier has an effective system to meet this requirement however NOT FULLY IMPLEMENTED to all areas.

3- Supplier does not have an effective system in place but WILL DEVELOP AND IMPLEMENT if requested by customer.

2 Supplier does not have an effective system and HAS NO IMMEDIATE PLANS TO DEVELOP AND IMPLEMENT a system

1- Supplier CANNOT meet this requirement.

ASSESSMENT ITEMMARKS SCORED

REMARKS1 2 3 4 5

B. MANAGEMENT  

1Is Quality Policy & objective defined, implemented & understood at all levels within the organization?

2Is responsibility and authority well defined & adopted in the organization?

3Quality system certification (ISO/TS) status? If not any future plan? By When?

4 CEO involvement / Commitment level?            

5 On job training & skill development activities            

6 Do supplier has a long term vision & road map to achieve it?            

C FINANCE & ACCOUNTS            

7 Does the Supplier have any concrete future expansion plans?            

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8Financial strength of supplier for investments in toolings / gauges / technology up-gradation / raw material etc.

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D ENGINEERING            

9 Overall Technical Competency of supplier            

10 Drawing control & change implementation system            

E QUALITY CONTROL            

11Availability of inspection standards ( Receipt / In-Process / Final Inspection ) & control plans

12Does supplier has the capability to check all requirements shown in drawing?

13Does the supplier have an effective system to ensure sub-Supplier conformance to requirements?

14Cust returned / line rejection data captured / analysis & CA-PA implementation system

F MEASUREMENT CONTROL            

15Is measurement controls checked periodically and history recorded?

16 Are Measuring instruments identified to their calibration status?            

               G IN-PROCESS CONTROL            

17 Set-up piece checks / periodic checks & records            

18Availability of detailed job instruction sheet (method of job / checks / sample size / frequency / check method etc,)

19 First piece / last piece certification system by Tool Room            

H MANUFACTURING PROCESS            20 Preventive & predictive maintenance system            

21 Production planning & monitoring system            

22 Tools / gauges identification & systematic arrangements            

23 Die / tool control system ( Replacement / Periodic maintenance )            

24Separate final inspection stage with designated inspectors and unique guarantee stamp

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               I PACKING & DISPATCH            

25 Separate FG store availability            

26 Separate receipt store availability            

27 Dock audit system            

28 Delivery monitoring system            

J ABNORMALITY CONTROL            

29Is their a laid down system for handling customer complaints (Quality / Delivery)?

30 Are Window persons Identified to handle customer concerns?            

31Are counter measures are taken after proper root cause analysis and actions are deployed horizontally?

32 Customer rejection awareness among employees            

33 Customer rejection re-occurrence monitoring & control system            

34 Availability of power backups / generators            

K DEVELOPMENT            

35 Development schedule monitoring system            

36 Sample approval status monitoring            

37Does the supplier have proper tool-room facilities for Proto /Sample making?

38Does the supplier have proper inspection tie-ups with competent agencies to periodically verify non inspect able parameters at his end?

L STORES            

39 Stacking & identification            

40 FIFO system            

41 Minimum inventory level controls            

42 Receipt & issue mechanism            

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M PURCHASE            

43 Approved vendor List            

44 Material planning & control            

45 System for inventory control & management            

46 Vendor performance rating & monitoring            

N  

47 Floor markings            

48 Cleanliness        

49Are hold areas clearly identified ( Scrap / Rework /Awaiting / Rejection )

O OTHERS

50 Labour situation ( recent any trouble )            

  Total            

SUMMARY    

Applicable Maximum Marks :

Remarks, if any  Marks Obtained :

Percentage Score :

Sign (Auditor) Sign (Auditor)  

Date : Date :  

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CASE STUDY

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APPL Industries Limited:

APPL Overview:

Established in Year 1990 – For Thermoplastics Compounds

State of art, five compounding plants with the capacity of 52000 MTA

ISO 9001: 2000 accreditation

TS 16949 accreditation on final stage

Turn over of INR 1200 millions.

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VENDOR ASSESSMENT/ AUDIT REPORT  

INTRODUCTION

A

Vendor Name : APPL- Industries Date of Audit : 20.06.2009

Vendor Code : Contact Person :Mr. Sunil Rai

Principal Auditor : Nimish Joshi Team Members :

Sr. Engg (Quality)Quality Engg

Previous Audit Date: N. A.Previous Audit Marks :

       Not Available

Marking Structure :

5- Supplier has a FULLY EFFECTIVE system in place to meet this requirement.

4- Supplier has an effective system to meet this requirement however NOT FULLY IMPLEMENTED to all areas.

3- Supplier does not have an effective system in place but WILL DEVELOP AND IMPLEMENT if requested by customer.

2 Supplier does not have an effective system and HAS NO IMMEDIATE PLANS TO DEVELOP AND IMPLEMENT a system

1- Supplier CANNOT meet this requirement.

ASSESSMENT ITEMMARKS SCORED

REMARKS1 2 3 4 5

B. MANAGEMENT  

1Is Quality Policy & objective defined, implemented & understood at all levels within the organization?

        5  

2Is responsibility and authority well defined & adopted in the organization ?

        5  

3Quality system certification (ISO/TS) status? If not any future plan? By When?

  2        

4 CEO involvement / Commitment level?         5  

5 On job training & skill development activities     3      

6 Do supplier has a long term vision & road map to achieve it?         5  

C FINANCE & ACCOUNTS            

7 Does the Supplier have any concrete future expansion plans?     3      

8Financial strength of supplier for investments in toolings / gauges / technology up-gradation / raw material etc.

        5  

               D ENGINEERING            

9 Overall Technical Competency of supplier     3      

10

Drawing control & change implementation system         5  

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E QUALITY CONTROL            

11

Availability of inspection standards ( Receipt / In-Process / Final Inspection ) & control plans

      4    

12

Does supplier has the capability to check all requirements shown in drawing?

        5  

13

Does the supplier have an effective system to ensure sub-Supplier conformance to requirements?

    3      

14

Cost returned / line rejection data captured / analysis & CA-PA implementation system

        5  

F MEASUREMENT CONTROL            

15

Is measurement controls checked periodically and history recorded?

        5  

16

Are Measuring instruments identified to their calibration status?

        5  

               G IN-PROCESS CONTROL            

17

Set-up piece checks / periodic checks & records         5  

18

Availability of detailed job instruction sheet (method of job / checks / sample size / frequency / check method etc,)

        5  

19

First piece / last piece certification system by Tool Room         5  

H MANUFACTURING PROCESS            20

Preventive & predictive maintenance system         5  

21

Production planning & monitoring system         5  

22

Tools / gauges identification & systematic arrangements         5  

23

Die / tool control system ( Replacement / Periodic maintenance )

        5  

24

Separate final inspection stage with designated inspectors and unique guarantee stamp

  2        

               I PACKING & DISPATCH            

25

Separate FG store availability         5  

26

Separate receipt store availability         5  

27

Dock audit system     3      

28

Delivery monitoring system         5  

44

J ABNORMALITY CONTROL            

29Is their a laid down system for handling customer complaints (Quality / Delivery)?

        5  

30 Are Window persons Identified to handle customer concerns?         5  

31Are counter measures are taken after proper root cause analysis and actions are deployed horizontally?

        5  

32 Customer rejection awareness among employees         5  

33Customer rejection re-occurrence monitoring & control system

        5  

34 Availability of power backups / generators         5  

K DEVELOPMENT            

35 Development schedule monitoring system       4    

36 Sample approval status monitoring     3      

37Does the supplier have proper tool-room facilities for Proto /Sample making?

        5  

38Does the supplier have proper inspection tie-ups with competent agencies to periodically verify non inspect able parameters at his end?

        5  

               L STORES            

39 Stacking & identification       4    

40 FIFO system         5  

41 Minimum inventory level controls     3      

42 Receipt & issue mechanism     3      

M PURCHASE            

43 Approved vendor List         5  

44 Material planning & control         5  

45 System for inventory control & management         5  

46 Vendor performance rating & monitoring         5  

N HOUSE KEEPING

47 Floor markings         5  

48 Cleanliness   2        

49Are hold areas clearly identified ( Scrap / Rework /Awaiting / Rejection )

        5  

45

O OTHERS

50 Labour situation ( recent any trouble )         5  

  Total 222          

SUMMARY    

Applicable Maximum Marks :250

Remarks, if any  Marks Obtained :222

Percentage Score : 88.4% Instead of 95%

Sign (Auditor) Nimish Kumar Joshi Sign (Auditor) (Auditee)

  Nimish Joshi  

Date : 20.06.2009 Date : 19.06.2009 Date

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CHAPTER – 6

FINDINGS, SUGGESTION AND CONCLUSION

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FINDINGS

1. 48.92% of the suppliers of varroc group (polymer division) are ISO certified.

2. 22.60% of the suppliers of varroc group (polymer division) are ISO/TS certified.

3. 64.70% of the suppliers which submitted their audit plan with Varroc group will be ISO certified by the end

of financial year 2009-10.

4. On the basis of case study it is observed that follow up audit is conducted in case of supplier fails to meet the

quality requirements of Varroc.

5. Supplier fails to meet the quality requirements for longer period are blocked for the business.

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SUGGESTIONS

On the basis of the study undertaken in Varroc, I hereby lay some suggestions for the problems revealed to me

by this study.

1. More focus should be provided on the research & development facility assessment of supplier.

2. Environmental awareness of supplier should be assessed.

3. Proper supplier support policy should be framed so as to seek supplier end inputs in cost reduction

activities.

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BIBLIOGRAPHY

1. C.R.Kothari, Research Methodology Methods & Techniques (2004), New Age International (P) ltd.,

New Delhi.

2. Indian Institute of Materials Management, Materials Management (2001), IIMM, Bangalore.

3. Pulse magazine, Varroc group, Volume II, no I, Jan-March 2009, Aurangabad.

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