CROMPTON GREAVES
Introduction:
Introduction:
Crompton Greaves is India's largest private sector enterprise in the business of manufacturing and marketing products related to the generation, transmission, distribution and utilization of power. It also executes turnkey projects.
From power systems to industrial systems & consumer products to digital telecommunications, people at Crompton Greaves are constantly designing, producing and marketing high technology electrical products and services that span the distance from need to fulfillment.
We visited the Vikhroli plant of Crompton greaves India ltd. and met Mr.Vasant Kulkarni, the asst. buyer.
Need for vendors:
Crompton greaves on a whole produces many different products like motors, heavy machines, etc. all of which contain many high precision parts. For all of this it becomes cost effective for CG to outsource the production of some of these parts, therefore the need for vendors comes in. One of the examples of parts they outsource is ball-bearings, as it is a very high precision product and for producing it would require incurring huge capital costs of the machines required to manufacture it.
Vendor selection process:
Selection of vendors is a very important process for any company, as the ultimate quality of the products the company manufactures depends on the quality of the inputs. There are specific guidelines for the selection of vendors, laid down by the company, which are to be followed by the buyers while selecting vendors. In general the major factors considered are firstly quality, then cost and also factors like the service provided by the vendor. As and when the materials are required an order is placed for the product. Depending on the product, the vendor selection process is undertaken. For example, the high precision products are purchased only from specific vendors, as for the other parts quotations are invited and the most appropriate vendor is given the contract.
There is no specific limit on the number of vendors to be used for a given product; therefore the company generally outsources the contract to more than one vendor as a safety measure.
Levels of inspection and vendor evaluation:
The design department reviews the materials coming in before the materials are actually used in the production procedure. If the specifications of the product do not meet the necessary requirements the following actions are taken depending on the product:
1) The respective vendor is asked to rework on the part to meet the specifications; or
2) The part is accepted with or without correction by concession; or
3) It is re-assigned for alternative applications; or
4) Rejected as unsuitable.
This process is referred to as non-conformity review and disposition.
Depending on the performance over a period of time a vendor is given preference over others in future selections.
Stock out, lead-time, inventory:
The inventory levels in the company are monitored efficiently so as to maintain the level effectively. Stock outs of necessary products are very rare. The company has a specific policy of maintaining a specific amount of lead-time, therefore when the stocks reach a certain inventory level the order for the products is generated and the level is retained.
Vendor relationship:
In CG the relationship of a vendor with the company is dependent on the buyer dealing with that specific vendor. The company as such does not maintain any specific codes to be followed as far as relationships with vendors is concerned, but the proprietorship suppliers get preferential treatment as the number of suppliers is limited, and the parts are of high precision.