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BUYER SELLER PARTNERSHIP BY TEJ MAGAZINE

BUYER SELLER PARTNERSHIP BY TEJ MAGAZINE. HIGHLIGHTS. WORKING TOGETHER WORKS INDUSTRIAL BUYING PHASES TRADITIONAL V/S MODERN STAY AND MOVE FORWARD BUYERS EXPECTATIONS -QUALITY - PRICE - SERVICE Contd…. Contd…... VENDOR EVALUATION SELLER EXPECTATIONS

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BUYER SELLER PARTNERSHIP BY TEJ MAGAZINE

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  1. BUYERSELLERPARTNERSHIPBY TEJ MAGAZINE

  2. HIGHLIGHTS • WORKING TOGETHER WORKS • INDUSTRIAL BUYING PHASES • TRADITIONAL V/S MODERN • STAY AND MOVE FORWARD • BUYERS EXPECTATIONS • -QUALITY - PRICE - SERVICE • Contd….

  3. Contd…... • VENDOR EVALUATION • SELLER EXPECTATIONS • TECHNICAL -COMMERCIAL -DIGNITY • AGREEMENT ON PROCUREMENT SYSTEMS • INTER ACTIVE PROCESS • ALL INDIA VENDOR MEET • -EXPERIENCE SHARING

  4. WORKING TOGETHER WORKS • “THERE IS NO LIMIT TO WHAT A MAN CAN DO, AS LONG AS • HE DOES NOT MIND, WHO TAKES THE CREDIT. TEAM • BUILDING WORKS. BUILD A CORE GROUP AROUND • YOURSELF • Contd….

  5. Contd…... • AS AMERICAN BILLIONNAIRE OIL TYCOON J. • PAUL GETTY CALLS THEM “MEN WITH THE MILLIONNAIRE • MENTALITY . PEOPLE, WHO ARE FORWARD THINKING, • COST CONSCIOUS AND PROFIT ORIENTED, AND, THEY WILL • BUILD TEAMS AROUND THEMSELVES, WHICH, SURE WILL • BECOME A PYRAMID, REACHING FOR THE MOON”.

  6. INDUSTRIAL BUYING PHASES • LOWEST PRICE • RUPEE SAVED IS RUPEE EARNED • BUDGET PRICING & PROFIT CENTRE CONCEPT • IMPORT SUBSTITUTION & VALUE ENGINEERING

  7. LIBERALISATION OF ECONOMYNEW CHALLENGES ON BUYING • CUTTING EDGE COMPETITION /SURVIVAL OF THE FITTEST • COST BENEFIT ANALYSIS • THRUST ON OUTSOURCING • JUST IN TIME (JIT) SUPPLY MANAGEMENT • CONTINUOUS QUALITY IMPROVEMENTS • CONTINUOUS COST REDUCTION • ENVIRONMENT FRIENDLY BUYING • OR • GREEN PURCHASE CULTURE • COMPUTERISATION / NETWORKING / ECOMMERCE • Contd…..

  8. Contd…… • ULTIMATE RECIPE FOR SURVIVAL • SUPRA PURE QUALITY • SUPRA LOW COSTS • FOOL PROOF SAFETY NORMS • ZERO EFFLUENT DISCHARGE

  9. BUYER - SELLER PARTNERSHIP & BUSINESS UNDERSTANDING ACHIEVES SIGNIFICANT IMPORTANCE CHALLENGES TO MATERIALS MANAGER INDIAN MM PROVED HIMSELF ADAPTABLE TO CHANGE CONQUER DIFFICULT SITUATION TO KEEP THE INDUSTRY’S WHEEL MOVING NOW FULLY GEARED UP TO MEET MODERN DAY CHALLENGES OF GLOBALISED BUSINESS ENVIRONMENT CUSTOMER IS THE KING GETTING SUBSTITUTED WITH CUSTOMER & SELLER ARE EQUAL PARTNERS IN PROGRESS BUYER AS RIGHT ARM SELLER AS LEFT ARM

  10. INPLANT MANUFACTURING V/S OUT SOURCING EUROPEAN/US CONSERVATIVE PRACTICE : INPLANT MANUFACTURING JAPANESE PRACTICE:MAXIMUM OUTSOURCING INDIA IN BETWEEN BOTH, BUT NEW THRUST ON OUTSOURCING EXAMPLES OF OUTSOURCING CANON PROCURES 89.9% COMPONENTS BY OUTSOURCING SONY PROCURES 98.8% BY OUTSOURCING CASIO NO. MFG.FACILITIES,ONLY VERY STRONG DESIGN FACILITY Contd…..

  11. Contd…. • OUT SOURCING ADVANTAGES • SUPPLIES ON JIT BASIS • LOGISTICS ADVANTAGE • LEAST INVENTORY CARRYING COST • LEAST OPERATIONAL OVERHEADS • LEAST HUMAN RESOURCES DEPLOYMENT • PAY FOR ACCEPTABLE QUALITY/QUANTITY

  12. VENDOR EVALUATION • MOST IMPORTANT IN BUYER/SELLER ALLIANCE • PROCESS (POINTS ALLOCATE) • 60% : QUALITY • 25% : DELIVERY • 10% : SERVICE • 5% : PRICE • INCORPORATE IN SYSTEM AS ON GOING PROCESS LINKED WITH EACH P.O / RECEIPT. • Contd...

  13. Contd…... • ONLINE DATA • QUARTERLY REVIEW • EDUCATE DEFAULTERS • CONTINUOUS REJECTION • SUSPEND VENDOR • RE-INSTATE ON NORMAL NEW VENDOR DEVELOPMENT PROCEDURE • AWARDS /RECOGNITION

  14. VENDOR’S ROLE VERY IMPORTANT TODAY.THEREFORE, THE CONCEPT OF PARTNERSHIP • MR. CONCORD COEN, DIRECTOR-CHRYSLER MOTORS,USA, • MENTIONS THAT “LONG TERM RELATIONSHIPS WITH FEW • VENDORS, WOULD BE NECESSARY IN THE NEW CENTURY”. HE • FURTHER MENTIONS THAT U.S. COMPANIES ACHIVE RESULTS • IN ENSURING “ZERO DEFECT” MATERIALS SUPPLIES, • THROUGH “QUALITY EXCELLENCE AWARD” • CONCEPT OF QE AWARDS NOW PREVALENT IN INDIA, TOO.

  15. TRADITIONAL V/S MODERN APPROACH • TRADITIONAL • BRAND LOYALTY CONCEPT • CONSISTENT RELATIONSHIP & CONFIDENCE IN EACH OTHER DEVELOPED OVER A LONG PERIOD • NO ATTEMPT IN IMPROVEMENTS OR CHANGE • LIKE DEDICATION TO KIRANA SHOP/ DHOODWALA/ AKHBARWALA • MODERN • KAIZEN:CONTINUOUS INCREMENTAL IMPROVEMENT • GEMBA KAIZEN : CONTINUOUS IMPROVEMENT AT WORKPLACE • CCQM: CONTINUOUS INCREMENTAL IMPROVEMENT,CULTURAL CHANGE & QUALITY MANAGEMENT • HENCE THE VENDOR GETS FULLY INVOLVED AS THE PARTNER IN PROGRESS & NOT MERELY AS A SUPPLIER OF GOODS.

  16. STAY & MOVE FORWARD IN BUSINESS • ACHIEVE WORLD CLASS QUALITY • IMPROVE FURTHER WITH ACCENT ON EXCELLENCE • ACHIEVE THROUGH QUALITY: • MATERIALS • OPERATIONS • PEOPLE • PROCESS • PRODUCTS • CUSTOMER SERVICE • Contd…...

  17. Contd... • VENDOR MUST UNDERSTAND BUYER’S CULTURE & BUSINESS PHILOSOPHY,ADOPT THE SAME IN HIS OPERATIONS, FINE TUNE FOR ULTIMATE CUSTOMER DELIGHT. • VENDOR ROLE HIGHLY IMPORTANT • CREATE WIN WIN SITUATIONS.

  18. BUYER’S EXPECTATIONS FROM A SELLER • QUALITY • PRICE • SERVICE

  19. QUALITY • FIRST & FOREMOST IN BUYER SELLER RELATIONSHIP • ANCIENT SAY: “PREVENTION IS BETTER THAN CURE ” APPROPRIATELY APPLIES IN MAINTAINING CONSISTENCY IN QUALITY. • EGYPTIAN PHARAOHS “BOOK OF THE DEAD” DOCUMENTED QUALITY SYSTEM RELATED TO BURIAL OF THE DEAD BODIES OF THEIR NOBILITY. • “HALL MARK “ SYSTEM FOR GOLD & SILVER 1140 AD • ISO 8402 DEFINES QUALITY AS : • “THE TOTALITY OF FEATURES AND CHARACTERISTICS OF A PRODUCT OR SERVICE, THAT BEAR ON ITS ABILITY TO SATISFY STATED OR IMPLIED NEEDS” • Contd…...

  20. Contd……. • WE CAN FURTHER SUPPLEMENT ISO DEFINITION WITH: • FITNESS FOR PURPOSE: VALUE FOR MONEY • RELIABILITY : CUSTOMER SATISFACTION • CONFORMANCE TO REQUIREMENTS • WORLD WAR II EXPERIENCE BROUGHT IN COMPLEXITIES IN MFG. PROCESSES & PRODUCTS • ORGANISED QUALITY INSPECTION TOOK FIRM ROOTS.

  21. TODAY’S THRUST • ZERO DEFECT • 1P.P. MILLION • VENDOR PERFORMANCE IN QUALITY DEPENDS ON BUYER EDUCATING THE VENDOR • TOTAL QUALITY CULTURE • QUALITY AUDIT • PRODUCT REQUIREMENT & SPECIFICATIONS • INPUT STANDARDS • Contd…….

  22. Contd….. • PROCESS REQUIREMENT • INDENTICAL QUALITY TESTING STANDARDS & INSTRUMENTS • TRAINING AT ALL LEVELS • INTERACTION WITH DIRECT USER-ANALYSER/R&D/CUSTOMER PURCHASE-MAJOR ROLE IN CO-ORDINATION • OUTCOME • QUALITY ASSURANCE PRACTICES COUPLED WITH THE THEME “VENDOR AS A PARTNER IN PROGRESS “ ENSURES THE VENDOR TO PERFORM TO DEMANDING QUALITY EXPECTATIONS OF THE BUYER

  23. PRICE • A BIG NO TO: • LOWEST-FIXED-ARBITRARY-GOVT. ADMINISTERED-CANALISED PRICES. • YES TO: • COMPETITIVE OR OPEN MARKET ECONOMY PRICING • RIGHT PRICE FOR THE RIGHT QUALITY • BALANCED PRICE FOR REQUIRED QUALITY • WIN WIN PRICE FOR THE BUYER & SELLER • LINKAGE PRICE (COMMODITY EXCHANGES) • TRANSPARENCY IN COSTING • KEEP PRICES FIRM FOR LONGER DURATIONS • WIDE ACCESS TO MARKET INFORMATION

  24. SERVICE • STRICT ADHERENCE TO COMMITED DELIVERY • RIGHT QUANTITY AT RIGHT TIME • HELP BUYER TO OPERATE ON LOW INVENTORIES (JIT OR “SHOP FLOOR TO SHOP FLOOR “ CONCEPT) • ENSURE CONTINUITY IN BUYER’S MANUFACTURING OPERATIONS UNDER ALL SITUTATIONS • KEEP CUSTOMER’S CUSTOMER IN MIND • ADEQUATE & ECO-FRIENDLY PACKING & PACKAGING • Contd……

  25. Contd…ZERO OR NEGLIGIBLE DEFECT QUALITYPRODUCT SHELF LIFEQUICK REPLACEMENT OF REJECTIONRESPONSE TIME TO COMMUNICATIONGENUINE GOODS / NO ADULTERATION / DUPLICACYContd…...

  26. Contd……. • CORRECT WEIGHT / MEASUREMENTINTEGRITY OF HIGHEST ORDERMEETINGS & VISITS BY PRIOR APPOINTMENTSCORRECT DOCUMENTATIONSELLER SHOULD NOT TAKE ADVANTAGE OF MONOPOLISTIC SITUATIONS

  27. SELLER’S EXPECTATIONS FROM BUYER • HIGHEST INTEGRITY & HONESTY FROM BUYER • VENDOR REFLECTS BUYER’S HONESTY IN PRICE • EDUCATING VENDOR ON QUALITY / PROCESS / SYSTEMS/IMPROVING VENDOR PLANT • EDUCATION A CONTINUOUS PROCESS • DETAILED TECHNICAL REASONS FOR REJECTIONS • NO TO “POOR QUALITY” / “ BAD WORKMANSHIP ETC. • Contd…..

  28. Contd… • GUIDING VENDOR ON : IMPROVEMENTS • GUIDING VENDOR ON :COST REDUCTION • GUIDING VENDOR ON : TECHNOLOGY UPGRADATION • GUIDING VENDOR ON : ECO-FRIENDLY MANUFACTURING • Contd……

  29. Contd…... • GUIDING VENDOR ON : SAFETY • GUIDING VENDOR ON : RIGHT SOURCING • GUIDING VENDOR ON : LOGISTICS / RETURNABLE PACKAGING • GUIDING VENDOR ON : “ISO - 9001 / ISO-14001” • OTHER INTERNATIONAL STANDARDS • Contd…….

  30. Contd…. • COMMERCIAL SUPPORT TO VENDOR • ONE WINDOW SERVICE: PURCHASE DEPT. • LOCATING MISPLACED DOCUMENTS • PAYMENTS AS COMMITED • DEDUCTIONS NOT ARBITRARY, REASON TO BE GIVEN • TIME BOUND RESPONSE TO OFFERS & FINALISATION OF PURCHASE ORDERS • FINALISATION OF ORDERS ON STRICT TECHNO COMMERCIAL MERIT • Contd…..

  31. Contd…… • C FORMS & ALLIED DOCUMENTS IN TIME • NO SUDDEN CANCELLATION OF P.O’S • HELP VENDOR IN LIQUIDATING RM STOCKS • HUMAN RELATIONS IMPORTANT • BUYER SHOULD BEHAVE AS ELDER BROTHER • NO UPMANSHIP OR UPPER HAND BEHAVIOR FROM BUYER • TREAT SELLER WITH DIGNITY • RECEPTION AT ENTRY CREATES BETTER CORPORATE IMAGE (L&T EXAMPLE) • COURTESY / GOOD BEHAVIOUR

  32. AGREEMENT ON PROCUREMENT SYSTEMS • SUPPLIER QUALIFICATION • PRODUCT SPECIFICATION • PRODUCT TESTING METHODS • QUALITY ASSURANCE • TOTAL QUALITY MANAGEMENT • PRODUCT INSPECTION • HOUSE KEEPING • ENVIRONMENT & SAFETY • OPERATING SUPPLY SYSTEM (JIT) • LOGISTICS • DISPUTE SETTLEMENT • RECYCLING OF WASTES ETC.

  33. INTER-ACTIVE PROCESS • VISIT VENDOR REGULARLY • GUIDE VENDORS EMPLOYEES AT VARIOUS LEVELS • ONE TO ONE MEETING WITH INDIVIDUAL VENDORS • ALL INDIA (WORLD) VENDOR MEET ONCE IN A YEAR • MOTIVATIONAL AWARDS / RECOGNITION • LOW VENDOR BASE • HIGH VOLUMES • WIN WIN SITUATIONS • Contd...

  34. Contd….. • BETTER INTERACTION • LONG TERM RELATIONSHIPS • PARTICIPATE IN SOCIAL FUNCTION OF VENDORS • INVITE VENDORS TO YOUR FUNCTIONS • CREATE SENSE OF BELONGING • MUTUAL RESPECT / FAITH & CONDFIDENCE IN EACH OTHER

  35. ALL INDIA VENDOR MEET EXPERIENCE SHARING • MY PERSONAL INVOLVEMENT IN FOSTERING VENDOR / VENDEE RELATIONS DATES BACK TO 1981, WHEN I STARTED FOR THE FIRST TIME REGULAR ANNUAL VENDOR MEETS IN THE COMPANY, I WORKED FOR SINCE THEN SUCH ATTEMPTS CONTINUE . IT WOULD BE INTERESTING TO SUMMARISE THE FINDINGS OF ONE OF THE VENDOR MEETS, AS UNDER: • THE DATA WAS COLLECTED FROM THE VENDORS PRESENT, BY CIRCULATING AN ANALYTICALLY DESIGNED QUESTIONAIRE. • Contd…..

  36. Contd…... • VENDORS WERE REQUESTED NOT TO SIGN OR WRITE THEIR RESPECTIVE NAMES, SO THAT THEY COULD EXPRESS THEIR VIEWS FREELY AND FRANKLY. • OUT OF 49 VENDOR PRESENT, 29 RESPONDED. • THE COMMON PROBLEMS HIGHLIGHTED WERE REQUEST FOR REASONS OF REJECTIONS. • INTIMATION AND DESPATCH OF REJECTIONS WITHIN A REASONABLE TIME. • DELAYED PAYMENT, AND PAYMENT TO BE RELEASED BY DD ONLY AND DD CHARGED TO VENDOR A/C. • PERMANENT GATE PASSES TO REGULAR VENDORS FOR VISITING FACTORIES. • ENQUIRIES & P.O.s TO BE ISSUED WITH COMPLETE SPECIFICATIONS. • NEW PRODUCTS TO BE ENCOURAGED. • DELAY IN SENDING C FORMS, ETC . ETC • Contd…...

  37. Contd…. OTHER HIGHLIGHTS OF VENDOR RESPONSE : • 1. PURCHASE ORDERS FINALISATION. • 70.8% VENDORS SENT PROPER QUOTATIONS AND 29.2% DID NOT. • 72.4% VENDORS MENTIONED THAT THEY DID NOT RECEIVE ANY RESPONSE ON QUOTATION, WHEREAS 20.7% MENTIONED THAT THEY RECEIVED RESPONSE. REST SILENT ON THE POINT. • 24.1% SAID THAT THEY RECEIVED ORDERS WITHIN A WEEK AFTER SUBMITTING QUOTATIONS. 20.7% RECEIVED WITHIN 16 - 30 DAYS. 27.6% WERE SILENT ON THE POINT. • 93.1% MENTIONED THAT THEY DID NOT FACE PROBLEMS, WHEREAS 6.9% MENTIONED THAT THEY FACED PROBLEMS, WHICH WERE NOT SPECIFIED. • 48.3% FELT THAT PERSONAL CONTACT HELPS IN THE PLACEMENT OF ORDERS. 34.5% DID NOT AGREE WITH THE VIEW . 17.2% WERE SILENT. • Contd…

  38. Contd… • 2. PRICES & PAYMENT • 91.7% CASES, PRICES REMAINED FIRM, ONLY IN 8.3% UNFAVOURABLE FOR THE BUYER. • 3. QUALITY • ­ THE STUDY HIGHLIGHTED THAT 64.6% VENDORS CONSISTENTLY SUPPLIED QUALITY MATERIALS, WHEREAS 35.4% VENDORS HAD PROBLEMS IN THEIR SUPPLIES. • 4. BEHAVIOUR • 86.1% VENDORS RATED BEHAVIOUR OF PURCHASE PERSONNEL FROM “QUITE SATISFACTORY “TO” EXCELLENT ”, WITH MAXIMUM 27.6% WITHIN THE PERCENTAGE, RATED THEM AS “GOOD”. 3.4% FELT THAT BEHAVIOUR WAS NOT PROPER, WHEREAS 10.3% DID NOT SPECIFY. • IN 95.8% CASES VENDOR’S BEHAVIOUR WAS FOUND GOOD.

  39. Contd……. • 4. BEHAVIOUR • 86.1% VENDORS RATED BEHAVIOUR OF PURCHASE PERSONNEL FROM “QUITE SATISFACTORY “TO” EXCELLENT ”, WITH MAXIMUM 27.6% WITHIN THE PERCENTAGE, RATED THEM AS “GOOD”. 3.4% FELT THAT BEHAVIOUR WAS NOT PROPER, WHEREAS 10.3% DID NOT SPECIFY. • IN 95.8% CASES VENDOR’S BEHAVIOUR WAS FOUND GOOD.

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