Evaluating Suppliers
Evaluating supply sources is another important, continuing process in a good
purchasing department. Purchasing management defines its objectives in terms of
meeting manufacturing material requirements with the best price, quality, and delivery.
Naturally, management would like to know how it is doing in relation to its goals. [Ref.
1]
Under traditional purchasing practices, each shipment sent to the distribution
point is checked to ensure contract performance. Based on this inspection, grades are
given and tabulated on a monthly basis. The result is an after-the-fact compilation of
contractor performance.
Under JIT purchasing, attention focuses on maintaining a good buyer-supplier
relationship. [Ref 3:p. 33] Specifically, JIT purchasing practices emphasize product
quality, supplier relationships, delivery performance and price. This order is the order
of importance for JIT. Under traditional purchasing operations, and for most
Government purchasing operations, price would receive the highest emphasis.