Source Selection

Some possible sources are as follows : 

1. The company's own past records of the vendor under scrutiny or other vendors who has supplied them in the past, 
2. Catalog-, 
3. Trade Directories, 
4. Internet - this is now the most popular method of obtain any kind of info don, 
5. Advertisements to register vendors, and 
6. Trade conventions. 

Some more points of consideration while embarking on a vendor development programmer are as follows  : 

1. There should not be so many sources that the buyer is no longer perceived by each supplier as an important customer. 
2. There should not be so few that it diminishes price and service competition. 
3. Given the nature of the supplies, the number of vendors should be accordingly. For custornised development requiring large amount of personnel interaction, it is advisable not to have more than 2 or 3. Since it involves personnel from technical and other departments also interacting with one another, the success of the venture depends upon strong and close ties. Further, it is uneconomical to interact so closely with other suppliers ad waste time. 
4. Fast moving items should have at least three vendors. 
5. Source should be close to point of actual storage or consumption. This is applicable if other things about competing vendors are common. 
6. A vendor development programmer does require some capital inputs in terms of computerization, hiring consultants, software etc. but the prime mover is "management intent". While this is not necessary to implement a vendor development program, its success is impossible without it. 
7. It is understood that a vendor development activity takes anywhere between 2 to 5 years to implement completely. It is advisable to quantify the benefits by implementing the vendor development system through a value chain or other method. This would help break-up the work into components and allow focus areas. 

Some areas where the benefits can bk shown are as follows 

• Conservation of working capital by operating on low inventories, 
• Cost consideration by buying rather than making, 
• Meeting large quantity requirement through more vendors, 
• Catering to seasonal variations in supply from vendors, 
• Reduced lead time in procurement, 
• Reduced costs in dual inspection, 
• Quicker payments to suppliers may actually mean reduced prices, 
• More credit facilities from vendors, 
• More productive time for material managers through proper 
• documented processes or computerisation, and 
• Less stockout, late deliveries or rejection problems.