MODULE ASSIGNMENT

IIPMM Module Assignment

IIPMM Module Assignment

Introduction

Most companies conduct performance evaluations of their suppliers. This need drives by tracking more precise quality of services, and a need important flexibility in a difficult economic environment where profitability is the dominant term business strategies. The very definition of performance, the main reasons that lead companies to evaluate their suppliers and the way companies evaluate their suppliers are important considerations while conducting any suppliers' evaluation.

(A) Difference between Supplier Appraisal and Supplier Evaluation

Supplier appraisal is conducted by the buying organizations before employing or engaging their services. Supplier appraisal is a crucial and vital process since it determines the feasibility of a supplier and his connection with the organization. Supplier appraisal refers to the activities that determine whether a particular supplier will be a feasible and effective option for the buying organization or is he not suiting the nature of the business for which he engaged (Chopra, Meindl, 2007, p. 89-101). In this case, the buying organization has to avail the services of its management and based on the specifications required, it assesses whether the given supplier will be of use to the company or not. This is the first step in the course, which determines the probability of cultivating a supplier-buyer decision.

Supplier appraisal carried out to see if the management teams of both organizations are on the same wavelength in terms of the nature of business that they perform. It also measures if the supplier has the same culture and ambitions as of the buying organization, in creating a strong business relation. It also involves addressing the issue whether the supplier has the capacity for operational extension and expansion in line with the business requirements and possibilities. We need to create a feasibility study to determine whether the supplier in focus will be fulfilling all these requirements and create potential benefits in the supply chain of the organization (Arnold, Chapman, 2008, p. 33-198).

On the other hand, supplier evaluation occurs once the supplier is hired, and services performed. It is a part of the strategic analysis process that defines and identifies the gap between the current and future performance according to predefined standards of the organization. The competitive demands have forced organizations, and collaborative business strategies to take over its chain of supply, in order to improve its performance in price, quality, time and service (Davis, 1993, p. 46). In this sense, the selection of a competitive supplier base is of foremost importance in the search for better results. Supplier evaluations are an indicator that the firm committed towards its customers and to provide the best services or products to the customer, for whom it tends to, improve upon every element of its supply chain. Therefore, choosing the best providers is a decision involving multi-criterion and a strong, strategic impact.

The main point of distinguish between supplier evaluation and appraisal is the same as in being proactive or reactive. Appraising the supplier before hiring ensures a steady decision in the right ...