1.

Write short notes on:

Intermodal transportation

Capacitated plant location model

Bulk shipments

Purchasing strategies
2. Discuss
the steps involved in the measurement of supplier
performance.
Following are the seven steps that comprise a process to
develop and deploy supplier assessment:
Aligning the goals and objectives of the supplier
performance with the organisations goals.

Identifying an approach for evaluating the supplier

performance.

Developing a method to collect supplier information.

Designing and developing a robust assessment system.

Deploying a supplier performance assessment system.

Giving performance feedback to the suppliers.

Producing results from measuring supplier performance.

Alignment of goals Measuring the performance of a supplier

cannot be completed quickly. It is a long term process.
Firstly, there must be a supplier policy that has its
foundation on the organisational goals and objectives.
Programs like Six Sigma, lean enterprise, continuous
improvement, total quality management and operational
 excellence are implemented in organisations to track
continuous improvements. If an organisation wants to
achieve the next level of excellence it must have key
suppliers whose goals match that of the organisation.
If an organisation provides just-in-time deliveries, then it must
have suppliers who support the company in every manner. Lack
of coordination will affect the cost, quality and delivery of the
organisation. Firms lay out strategies in accordance with the six
sigma business model, and follow them to achieve their goals.
When a company does not involve any strategies to improvise, it
becomes difficult for the organisation to keep track of the
supplier performance.
Choose evaluation approach
The evaluation approaches differ from company to company.
The various aspects for evaluation can be listed as follows:

Financial strength

Operational performance metrics

Business processes and practices

Enabling cultural or behavioural factors

Risk factors Now let us discuss every aspect in

detail. Financial strength It is an important factor in the
case of long term supply partners. Factors such as sales,
liquidity and productivity are indicators of financial strength.
The financial data can be retrieved using independent
credit rating companies or analyst reports or other trade
references, banks and regulators. Generally, data is not
available easily for private companies so a better way to
obtain information is to get it directly from the suppliers.
Operational performance metrics It covers areas like
scheduled delivery, quality, receptiveness, inventory
 turnover and customer service call response time. The data
on these areas can be obtained from either retrieving them
from the company database or getting reports from supplier
or by conducting surveys to know the customer satisfaction
level. Business processes and practices The processes and
practices from the business point of view is to review the
way a supplier runs his business and offers products or
services at a value as best as possible. Best value Sikkim
Manipal University Page No. 128

Operations Management Unit 6

here refers to delivering the product at the right time and also
adhering to all the specifications of the customer.
Data regarding business processes and practices can be
retrieved via questionnaires and conducting surveys, also from
site visits to supplier workplace. Such data is of great importance
while creating and maintaining long term relations that are
profitable to both the parties.
Enabling behaviours or cultural factors At the heart of Business
models like Six Sigma and Malcolm Baldrige National Quality
Award criteria, are the enabling behaviours like focus on
customers, rapid improvement, teamwork and quickness.
For example, suppose suppliers do not improve even after being
given several chances, it means that they are not synchronising
with the organisation methodologies. In such cases business
models must be incorporated.
Risk factors Evaluating the suppliers is to understand factors
that can cause risk. The risks that are identified at earlier stages
can help uncover them in future. All the previously discussed
factors can be recovered. But risks cannot be determined by
evaluating the performance in the past and assuming the future
developments. Most companies focus on the financial risk
factors. The risks commonly involved in operational performance
environment are trading relations and exchange of currency with
foreign clients.
Develop information collection method
The various methods implemented for the collection of data can
be listed as:

Paper based questionnaires

Web based questionnaires

Retrieval from existing database

Visiting supplier sites

Certification to third party standards such as IS0

9001, ISO/TS 16949 Design a robust assessment system
The approaches that are undertaken to design a robust
system for assessment may be listed as follows:

Comparing the organisations performance with the

industry standards.

Computing the performance with the business

models. Sikkim Manipal University Page No. 129

Operations Management Unit 6

Accepting third party standards.

Creating KPIs (Key Performance Indicators) and

scoreboards that are based on the system data or the
feedback got from client.

Creating a performance guideline of your own and

evaluating against it. Deploy the system Deploying a
system is a tough task in the assessment systems. Certain
systems that require extraction of data need to deploy
 different systems that share information. In the case of
questionnaire based systems, participant might feel it
tedious to fill the entire questionnaire. When the concern is
regarding on-site audits, personnel mainly from the cross-
functional teams need to be trained. Give actionable
feedback Feedbacks given to suppliers must be such that
it makes an impact. The company giving feedback must
have a correct conversation with the supplier company on
the performance and work on the issues that are critical for
the business. There must be a two way communication
between the companies. Produce results Supplier
performance measurement is all about understanding,
interacting and improvising the supplier performance.
When all these areas are taken care in the right manner, it
will indirectly have an impact on the performance of the
supplier. The supplier performance measurement steps up
to the supplier development, and then to the improvement
in performance which in turn affects the customer
financially.

3. Write short notes on:

Lead time reduction

Cross docking

Distributor integration e-sourcing

4. What are the issues faced in global supply chain?

5. What is standardisation? Explain the four approaches to
standardisation?
6. Discuss the impacts of e-commerce on SCM.