Vendor Management Cell – Essar Group Presentation to all employees of Essar March 2007.
-
Upload
laura-parsons -
Category
Documents
-
view
217 -
download
0
Transcript of Vendor Management Cell – Essar Group Presentation to all employees of Essar March 2007.
Vendor Management Cell – Essar GroupPresentation to all employees of Essar
March 2007
Why?
Vendor Management
• Governance
• Streamline & Implement SOP for Vendor Management
• Relationship management
• GLOBAL list of reliable registered Vendors
• Unified vendor code
• Managed acquisitions
Objectives
• Scattered Vendor Information across the group.
• Various format
• Centralized repository of vendor data
• Unification of vendor across the group
• Proper classification of vendor’s and flow of such authentic information across group
Key Issues
Methodology
• Study of existing system
• Opinion of stake holders
• Development & Implement of procedures & formats
• Web enabled system
• Centralized repository of vendor database
• Dialogue with Trade commissioner of various countries.
• TASK force for Unification of vendor across group
New System
• Vendor Information
• Pre registration evaluation
• Periodical evaluation of existing vendors
• Unification of vendor
• Centralized repository of vendor database
Pre Registration Evaluation
• Analyze the information provided by vendor
• Decision about the requirement of additional vendor for a specific product / service.
• Panel of expertise for various product/services for pre registration evaluation
• Feedback from the listed customer of a vendor
Panel of Expertise
PANEL OF EXPERTISE FOR PRODUCT / SERVICE GROUP Number of Experts
Automation System 10
Cement 4
Construction Equipments 7
Control Valves, PRD 10
Electrical Consumables 8
Field Instruments 10
General 8
HT & LT Motors 8
HT & LT Switchgears 8
Instrumentation Consumables 10
Material Handling 9
Mechanical Consumables 14
Piping 11
Refractory Insulations 7
Rotating Equipment 15
Static Equipments 7
Steel 4
Technology Package – Power 11
Technology Package – Refinery 7
Technology Package – Steel 7
Transformer & High Technological Packages 8
Utility Packages 18
Grand Total (Considering common experts )36
Evaluation of existing vendor
• No of vendors to be evaluated:
High Spend Suppliers : Can be determined by 80-20
rule
SupplierSpen
dInclude
ABC Company
XYZ Inc
Paper Clips Store
Spend Captured
INR
Yes
Yes
Yes
Value
High impact supplier: Shut company’s production line down / Project delayed:QualityDelivery
Reduction of profit?Price
Poor after sales service
Vendor Scorecard
Performance
MeasuresWeightage (%) Score of supplier
Weighted point
Price 30 70 21
Quality
40 80 32
Delivery
20 70 14
Service
10 70 7
Total 74
Supplier weighted average scorecard
Flow Chart (New Vendor)
CENTRALIZED VENDOR LIBRARY
NEW VENDOR
VENDOR REGISTRATION
FORM
APPROVAL AUTHORITY
VENDOR MANAGEMENT
CELL
PANEL OF EXPERTISE
PRE REGISTRATION EVALUATION
+
EV
ALU
ATIO
N
REP
OR
TAPPROVE
REJECT
Flow Chart (Existing Vendor)
CENTRALIZED VENDOR LIBRARY/
SAP
EXISTING VENDOR
USER DEPARTMENT
(ACROSS GROUP)
VENDOR MANAGEMENT
CELL
EVALUATION (WAR)
VENDOR RATING
VENDOR RATING
Unification
Mile Stone Target Date
Consolidate & mapped the cleaned vendor data of all client
31st March 2007
Mapping of unified vendor code with existing code
31st March 2007
Identify & Fix the Vendor block types :Activity & stage wise blocking of vendor
15th March 2007
Authorize to MDM team for vendor code creation in new system
1st April 2007
Unification Flow Chart
REQUEST FOR VENDOR CODE CREATION
(USER DEPARTMENT )
AUTHORIZATION BY HOD (USER DEPARTMENT )
REQUEST TO MDM
INFORMATION AVAILABLE IN DATABASE
/ SAP CODE EXISTS
YES
NEW / EXISTING SAP CODE
NO
VENDOR APPROVAL PROCESS
NEW SAP CODE
Benefits
• Standard procedure of vendor registration & approval
• Reduce Risk
• Gain flexibility
• Improve vendor performance
• Obtain competitive advantages
• Unified vendor code across group
Special Emphasis on China
• Global Sourcing team in China
• Primary responsibility: Evaluate vendors for different products & services
• Statistics as on February 2007.
• Another 527 nos vendors have been identified for evaluation
Category RecommendedNot
RecommendedGrandTotal
Common 51 4 55
Power 3 1 4
Refinery 12 5 17
Steel 19 1 20
Total 85 11 96
East Europe & CIS
Identification of new vendors:
COUNTRY
CATEGORY POLAND RUSSIA ROMANIA UKRAINECZECH
REPUBLIC
SOUTH KOREA
ITALY
POWER 10 3 3 2 6 3
REFINERY 1 1
STEEL 1 4 2 10 3
COMMON 35 25 20 13 15 18 25
MECHANICAL CONTRACTOR
14 1
ELECTRICAL CONTRACTOR
CIVIL CONTRACTOR
1 2
TOTAL 48 32 39 16 21 18 34
Trinidad project
VENDOR
CATEGORYCOUNTRY
BRAZIL VENEZUELA GUYANA
CIVIL CONTRACTOR 10 13 6
STRUCTURAL FABRICATOR
4 6
CONSTRUCTION MATERIAL
7 5
CONSTRUCTION EQUIPMENT
10 2
TOTAL 31 26 6
For Trinidad & Tobago integrated steel plant
Future Plans
• China model for Eastern Europe & Other low cost countries
• KAM concept
• Vendor self appraisal
• Vendor satisfaction program
• Centralized vendor library more informative.
• Vendor vs Cost trend
• Full proof vendor rating system
Approval process
Transaction
THANK YOU
Need your valuable suggestion for further improvementNeed your valuable suggestion for further improvement
E-mail: [email protected]: [email protected]