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Title: Supplier selection for procurement A quantative approach
Researcher: Yadav, Gaurav
Guide(s): Singh, Rajesh
Keywords: Engineering
Engineering and Technology
Engineering Mechanical
University: J.S. University, Shikohabad
Completed Date: 2019
Abstract: The aim of this research is twofold, firstly to recommend structural changes in the procurement system at the OEM and secondly provide simple quantitative models to assist the decision maker. OBJECTIVES: newline1. Suggest scientific classification of items using a quantitative model for redesign of the Inventory procuring process at the OEM. newline2. Estimating ultimate count on vendors number while considering the probability of supply discontinuation. newline3. Formulate methodology of vendor evaluation for both existing and new vendors newlineFirst Part of the work deals with the problems of raw material/products categorization, type s agreements and structural changes which occurs in the system. In order to identify the item as strategic, development, bottleneck or normal, a quantitative model has been developed. It consists of four decision variables namely disruptions in supply, failure rate, technological intensiveness of item and price. Now all products are sort out and presently with same kind of bid and procedure but it has been observed by research that such a plan is neither productive nor scientific. Thus for each classification a different plan has been proposed. For the items belonging to bottleneck, vendor effort has to be ensured and the vendors need to be counsel. newlineOut of 1876 items, two vendors are available to supply around 185 items which is required for production of HP engine. Structure of company has been proposed which should definitely give impetus to the effort; the existing Material Control Company (MCO) should act as the Suppler Development Cell for the OEM. newlineConsidering the probability of supply disruptions, the second part focuses on determining the number of vendors both at global and local level. The present setup has been found very resource intensive as for a few cases in same class of items more than 15 vendors are operating. The OEM has not been able to decide on the ultimate number of vendors. This is unmanageable and also does not give any vendor the advantage of volumes thus increasing the item s cost, which is direct loss to the OEM. The variables for the model are Probability of supply disruption due to global event and local event, the operating cost of a vendor and loss due for supply disruption. The sensitivity review of the model has been undertaken to observe the effect of each variable on ultimate number of vendors. newlineThe third and last part of work concerns with the evaluation of Vendor s performance and capability. In many studies both of them have been treated same, but for this particular research these two have been dealt differently. A quantitative model, using loss function of Taguchi s and Analytic Hierarchy Process (AHP), also known as Multi Criteria Decision Making (MCDM) technique, has been developed to assess the vendor s performance for preparing the Approved Vendor list. Three classes of vendors have been proposed, namely; Approved, Enlisted and Potential. For new vendors, an evaluation procedure using six defined capability factors and AHP has been developed. This can provide objectivity to the decision. newlineThe expected benefits are reduction in the cost of items by 2-5% by optimizing the number of vendors and long term relationships. This will also ensure reduction in the potential loss due to supply disruptions, which will mean reduction in financial loss due to non availability of engine. An engine has earning potential of Rs 3 lakh per day. Then the reduction in inventory by 2 months will mean a financial gain of Rs 42-68 crore annually by way of reduction in loss due to interest on capital. newlineRedeployment of trained manpower involved in purchase and vendor selection, where much of the work would become routine and redundant. By streamlining the process this manpower can be effectively utilized elsewhere where there is no alternative to technical work.
Appears in Departments:Department of Mechanical Engineering

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01_title_page.pdfAttached File80.77 kBAdobe PDFView/Open
02_certificate_of_sup_declr.pdf764.13 kBAdobe PDFView/Open
03_ack_cont_list_of_tbl_and_fig.pdf361.3 kBAdobe PDFView/Open
04_chapter-1.pdf727.66 kBAdobe PDFView/Open
05_chapter-2.pdf555.39 kBAdobe PDFView/Open
06_chapter-3.pdf912.65 kBAdobe PDFView/Open
07_chapter-4.pdf1.34 MBAdobe PDFView/Open
08_chapter-5.pdf1.82 MBAdobe PDFView/Open
09_chapter-6.pdf515.52 kBAdobe PDFView/Open
80_recommendation.pdf284.02 kBAdobe PDFView/Open

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