Sunday, October 1, 2023
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What is Vendor rating system of maruti suzuki company

Vendor Rating System of MSIL

MSIL (Maruti Suzuki India Limited) is largest car maker in India. It is subsidiary of Suzuki Motor Co. Limited. This company MSIL build cars in Haryana, Gujarat states of India. In Haryana state it has 2 major manufacturing units, one in Manesar and other in Gurgaon (Now-Gurugram). This car maker has its own vendor parks to avoid any supply shortage. Almost 60% of its vendor are with 25 KM range. 

Maruti Suzuki company today has built a strong supply chain system with its vendor partners. Maruti Suzuki India Limited Company has its own vendor quality manual, that vendor quality manual has to be followed by all vendors. The supplier rating system has also been included within the vendor quality manual, which I will explain in this article.

Maruti Suzuki Company shares a report every month to its vendors, in which the performance of the vendor remains for the month. Maruti Company Evaluates Vendor Ratings On Certain Factors, which included defect supplier to OEM, delivery fault, report submission, online rejection during assembly, line rejection, defect category, etc..

All these factors have some marks, and the vendor has to earn more and more marks to perform outside, this also benefits the vendor somewhere from business point of view. Top performers are remains in first preference whenever MSIL has to issue new business to vendor. 

From this article you will understand the rating system, how many marks are there and in which category they are given, and what is the formula of marks calculation, you will understand the breakup system of marks from this article.

Supplier Rating System enables companies to make informed supply decisions that are optimal for the entire business. On supplier rating we can take decision which product areas would benefit from an expanded supplier base or consolidation of existing suppliers.

Supplier Rating System provides you with a complete, view of each supplier’s performance.

Here supplier rating system is explained for big organization, which has more than 200 vendors, which are directly supplying parts.

Total number of marks could be different for various organization, number of marks could be different, but method of giving marks under various criteria is almost same:-

Below is Rating system of Maruti Suzuki India Limited Company. 

Total Breakup of marks in Rating System (2500)

Total Rating Marks will be =2500

Breakup of total marks:- Monthly Basis (1000) + Annual Basis (1500)
 
Summary Table

 

Breakup of Monthly Rating System

Quality Rating + Delivery rating= 1000 Nos

  • Quality Rating marks:- 700 Nos
  • Delivery Rating marks:- 300 Nos

Breakup of Quality Rating marks (700 Marks)

Incoming Quality  + Warranty = 700 
  • Incoming Quality Marks = 350 marks
  • Warranty Marks = 350
Marks Calculation for incoming quality:- 
  1. Defect rating= 150 Marks
  2. QPCR =50 marks
  3. Line Rejection Rating= 100 marks
  4. Record  Management=  50 marks.

1. Defect rating:-

Defect Rating formula is:-150-( A* 75-F*30-G*10- R*25-)*K
  • A= Nos of A rank defects [Safety Defect]
  • F= Nos of functional defects
  • G= Nos of general Defects
  • R= Nos of repeated defects
  • K= Factor (Nos of defects/Total nos of active supplied parts)

2. QPCR rating:-

QPCR rating calculation formula:-50-( G* 50+R1*50+S*50+K*50)
  1. G*= QPCR (Quality problem Counter measure Report) raised for global audit
  2. R1=QPCR raised for receipt inspection
  3. S= QPCR raised for spare parts
  4. K= (Kadio) if QPCR is raised for parts supplied outside India

Note:- If QPCR raised then 50 marks will be reduced.

3. Line Rejection Rating :-

First we have to understand categories of line rejection. Line rejection rating marks are 100 Nos.
  • A-Design fault 
  • B- Wrong part supply by vendor
  • C-Damage during transportation
  • D- Damage due to improper packing
  • E-Parts without sample approval
  • F- Obsolete parts supplied by vendor
  • G =Rusted material supplied by vendor
  • H=Rework rejection
  • I = End NG
  • J= Blow hole
  • Q= Quality issue*
Line Rejection Rating Formula is (100 – PPM) as shown in below picture:-

in above formula you can see, its depend upon PPM, formula is 100-PPM. Defect parts is supplied to Customer in any defect category will be count in Q category for ppm calculation. Lets say you have not sent any defect part at customer end, so your PPM will be zero and line rejection rating will be 100-0=100.

4. Record Management Rating:-

Record management rating marks are 50. These marks are given on the basis of on time submission of documents at customer end. Marks are given in two factors:-

  • 4M change record- 25 marks
  • Monthly inspection report submission- 25 marks

All documents to be submit before decided target date, if you delayed, marks will be cut, if submit in first week of month then 25/25 marks for each factor, if you submit in 2nd week of month then 12.5/12.5 marks, if you submit in last of month then ZERO.

Breakup of Warranty Rating Marks (350)

Total marks for Warranty is 300. And marks are given into two factors.
  • Nos of claim- 175 marks [Nos of claims/10000—175]
  • Warranty Cost -175 marks [Warranty cost/Part supplied—–175]

Calculation for warranty marks:

8.75 marks deduced for every claims per 10000 parts supplied & 17.5 points to be deduced for every claim of 10 paisa per part supplied. You can understand by below picture:-

Breakup of Delivery Rating marks (300)

Total marks for Delivery is 300. Monthly rating for delivery is divided into 3 factors:-
  1. Quantity Default –75 marks
  2. Time Default—–150 marks
  3. Spare Default——75 marks
1. Quantity default:- 75 marks 

QD= 75- (n*18.75*100);  Here [n= % of qty default in N months]

%QD= No of Nagare Default/ Total Number of E nagare Count

Note:- If %QD>0.03% then marks will be Zero.
2. Time Default- 150 marks

T.D= 150-(n*1.5*10); Here [n= % of  time default in N months]

%TD = Total No of time default (>2 hours)/Total E-Nagare

Note:- if %TD is more than 7.5% the marks will be ZERO.

3. Spares Default

S.D= 75- (n*3.75); [n= % of  spare default in N months]
 
Note:- if %SD is more than 15% the marks will be ZERO.
 

Annual Basis Rating System (1500)

Ranking is given under below categories as shown in photo:-

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