VENDOR EVALUATION

Chapter 4 – Data Collection & Analysis

4.1 Understanding the requirements of the buyers
The study was done to understand the buyers in terms of:
• The Divisions
• The Seasons the Buyer works on
• The Order Quantities
• The Production Lead Times
• The Product Types
Buyer: ANN INC
1. Divisions:
Woven
2. Product Range:
tops, Pants, Skirts, Jackets.
3. Order Quantities
1000 – 5,000 pcs. aprox
4. Seasons:
Spring 20
5. Production Lead Time
120 Days
6. Fabric Lead Time
15-30 Days

4.2. The Identified KPI’s

The important Key Performance Indicators of the vendors which should be considered when
measuring efficiency of the vendor for evaluation were listed by visiting the factories and
analyzing the Key areas.
The Key Performance Indicators identified and analyzed in four operation domains defined are:
1) Source
a) Fabric sourcing efficiency
b) Timely Delivery
2) Planned T&A v/s Actual T&A
3) Deliver
a) On Time Shipment
b) Order Fulfillment
c) Quality at Delivery
4) Costing
4.3. Vendor Evaluation
Evaluation of vendors is done in a step-wise manner on the basis of three styles selected for
each vendor for a particular season.

4.3.1. Ranking:
This step aims to order the Key Performance Indicator according to how important each is
considered to be. Parameters on which the vendors are evaluated are mentioned above.

4.3.2. Rating technique:

The technique that will be followed is the weighted mean technique. To find the weightage of
all main KPI’s in, they were rated on the scale of 1-5 (5-highest rating, 1- lowest rating) by the
Merchandisers and the Quality Assurance people.

KPI AVERAGE RATING

FABRIC SOURCING EFFICIENCY 4.8
Timely Delivery 4.2
On Time Shipment 4.6
Order Fulfillment 4.2
Quality at Delivery 4.8
Costing 4
First Fit 3.2

4.4 Calculation of Key Performance Indicators

4.4.1. KPI 1: FABRIC SOURCING EFFICIENCY (QUALITY)
The data against the KPI has been collected at the sampling stage when the fabric requirement
of the buyer is to be sourced. The parameter shall evaluate the adherence of quality standards
of material received from vendors to that specified i.e. deviation from the quality levels.
It measures the sourcing efficiency of the vendor, i.e. if the vendor is capable of sourcing the
exact fabric required by the buyer in time.
There can be three cases: On a scale of 100 points, the points can be allocated as below:
Case 1: The exact fabric requirement is sourced and approved in the first submission on time-
100 points.
Case 2: The exact fabric cannot be sourced, not even a close match and is rejected for 3-4
submissions - 0 points.
Case 3: POINTS
CRITERIA
Exact fabric sourced and approved in the 70 points
second submission within time
Similar fabric sourced and approved in the 60 points
second submission within time
Exact fabric sourced and approved in the 50 points
third submission within time
 Similar fabric sourced and approved in the 40 points
third submission within time

The data collected was (Refer Annexure 2):

 The submissions done for the fabric at the sampling stage
 The time frame for the fabric submissions.
(Source: The trackers and files maintained by the merchants)
For each vendor the data of submissions for four styles was collected and the KPI was
calculated according to the criteria’s given above.
The results were as follows:

VENDOR KPI VALUE

TEXPORT 70
LT KARLE 80
MODLAMA 63.33

FABRIC SOURCING QUALITY

90

80

70

60

50

40

30

20

10

0
TEXPORT LT KARLE MODLAMA

ANALYSIS: The fabric sourcing efficiency of Texport and Modlama needs to be improved as the
rejections of fabric at the submissions stage are very crucial for getting the orders. Rejections
can hamper the business of the factories.

4.4.2. KPI 2: TIMELY DELIVERY RIALSOF RAW MATE

This parameter is aimed at evaluating whether the quantity ordered is delivered on time or not
for fabric and trims ordered. The time considered is a percentage of the lead time of the raw
material. However, in case of late delivery the penalty shall be according to the % lead time
delay as per matrix below. A percentage of the lead time is being taken as different materials
have lead times varying from one to thirty days.

DELAY SCORE
PERCENTAGE
0% DELAY 100
UPTO-10% DELAY 70
10-20% DELAY 50
20-30% DELAY 30

The data to be collected was (Refer Annexure 3.)

 Type of fabric
 Lead time for the Fabric
 Planned Fabric In-house Date
 Actual Fabric In-house Date
 Planned Trims In-house date
 Actual Trims In-house Date
 The difference between the Planned and Actual dates was calculated and the delay was
expressed as a percent of the Lead time.
(Source: Trackers maintained by the merchants).
The Results were as follows:

VENDOR KPI VALUE

TEXPORT 90
LT KARLEY 58
MODLAMA 73.33
 TIMELY DELIVERY OF RAW MATERIAL
100
90
80
70
60
50
40
30
20
10
0
TEXPORT LT KARLE MODLAMA

ANALYSIS: The highest score wad given to Texport and the least score was given to LT Karle.
This shows that the factory needs to improve their inhouse delivery time as it may further affect
the final shipment of the order.

4.4.3 KPI 3: On-Time Shipment

Shipment at the exporter's end is just the delivery of goods.
If these goods are exported by the manufacturer as per scheduled date then it is termed as on -
time shipment. While delay in shipment is of great concern and dealt with in this parameter,
early shipment also draws penalty.
This KPI is calculated as (volume/value of orders shipped x weightage points) * 100 / (total
volume/value of orders).
Higher the KPI better the on-time shipment performance.
The criteria for points given as follows:

SHIPMENT STATUS WEIGHTAGE POINTS

Early by more than 5 days 80
On-time 100
01-07 days delay 60
08-15 days delay 30
More than 15 days delay 0

The data has been collected for the order quantities season wise for Spring 20 for all the three
vendors.
The Data collected was (Refer Annexure 4)
 Volume of Orders in a particular season
 No. of pcs shipped on time
  Delay in the Orders shipped
(Source: The Shipping team)
The results were as follows:

VENDOR KPI
TEXPORT 97.79
LT KARLE 94.20
MODLAMA 93.31

ONTIME SHIPMENT
99

98

97

96

95

94

93

92

91
TEXPORT LT KARLE MODLAMA

Analysis: From the above KPI and graph it is evident that Modlama is unable to meet its
shipping targets efficiently and Texport is the best performance factory that meets the shipping
targets most efficiently.

4.4.4 KPI 4: Order Fulfillment

For a company, the quantity to be shipped by the manufacturer (as per the Purchase Order) is
the order quantity. If the manufacturer ships the exact quantity then we called it as order
fulfillment, but in case any variation, whether positive or negative is termed as excess or a short
shipment respectively. Both shortage and excess quantity is subject to penalty.
This KPI is calculated by calculating the deviation from the order quantity and assigning scores
accordingly. Higher the KPI better the order fulfillment efficiency.

EXCESS/ SHORTAGE SCORE

0% 100
Excess or shortage by upto 90
 10%
Excess or shortage by >10% 0

The data has been collected for the order quantities season-wise for the previous year, for each
of the vendors. (Refer Annexure 5)
(Source: Order Delivery reports from the Merchants).
The results were as follows:

VENDOR KPI
TEXPORT 60
LT KARLE 93.33
MODLAMA 93.33

ORDER FULFILMENT
100
90
80
70
60
50
40
30
20
10
0
TEXPORT LT KARLE MODLAMA

Analysis: Texport has the lowest KPI which indicates that order fulfilment efficiency of Texport
is the lowest. LT Karle and Modlama were not meeting the shipping targets on time but their
order fulfilment efficiency is good.

4.4.5. KPI 5: QUALITY AT DELIVERY

Quality performance is an overall index to measure the capability of a company to churn out
goods right first time in the right quantity, at the right time and right quality. Quality at delivery
point is checked and sometimes advised for 100% re-screening.
Data has been collected for the Final inspection reports for three styles for each of the vendors.
The KPI is calculated by dividing the total number of defects by the total quantity shipped.
The lower the KPI the better it is.
The data was collected from the quality auditors’ team. The data to be collected was (Annexure
6):
• Order Quantity
 No. of Pieces being shipped
 No. of cartons
 No. of cartons checked

The results are as follows:

VENDOR KPI
TEXPORT 9.24
LT KARLE 8.88
MODLAMA 5.45

ORDER FULFILMENT
10
9
8
7
6
5
4
3
2
1
0
TEXPORT LT KARLE MODLAMA

Analysis: Texport has the highest KPI, the highest percentage of defects 0.092% in the total
shipment followed by Lt karle and Modlama at 0.089% and 0,054% respectively. This shows
that texport needs to improve its quality of delivery and internal audits and inspections of the
factory need to be made more efficient. However, Modlama has an efficient internal audit and
inspection as the number of defects is the lowest.

4.4.6. KPI 6: COSTING

The costing provided by the factory is a very important criterion. The number of times cost is
given by the factory shows the effectiveness of the merchandisers of the factory. This KPI
indicates the number of times the factory has given the costing and the efficiency of the factory
in giving an efficient and acceptable price.
The data was collected from the merchandising team. The scores are given on the following
table:

Approved and finalized in first

cost sheet 100
Approved and finalized in 2 cost
sheet 90
3rd 80
4th 70
5th 60
6th 50
7th 40

The results were as follows:

VENDOR KPI
TEXPORT 100
LT KARLE 83.33
MODLAMA 80

COSTING
120

100

80

60

40

20

0
TEXPORT LT KARLE MODLAMA

Analysis: The above graph shows that Texport has the highest score of 100 followed by Lt karle
and Modlama. This shows that Texport is the most efficient in giving an acceptable price.
Modlama needs to improve its costing quoting efficiency.

4.4.7. KPI 7: FIRST FIT DUE

The first fit is requested by the buyer rom the factory. The first fit is checked by the tech team
on the basis of the specs in the tech pack. This factor takes into account the request date and
actual date of first fit sample. It indicates how the factory follows the planned T&A provide by
Triburg.
The data was collected from the WIP sheet prepared by the merchandisers for all the styles
factory wise. (Annexure 7)
The scores are given on the basis of the following table:

On time 100
Late by 1-10 days 90
Late by 11-20 days 80
Late by 21-30 days 70
Late by 31-40 days 60
Late by 41-50 days 50
Late by 51-60 days 40

The results were as follows:

VENDOR SCORE
TEXPORT 96.67
LT KARLE 100
MODLAMA 46.67

FIRST FIT DUE

120

100

80

60

40

20

0
TEXPORT LT KARLE MODLAMA
Analysis: It is clearly evident through the above graph that Lt Karle is most efficient in following
the T&A followed by Texport. Modlama is the least efficient in following the planned dates in
the T&A and needs to improve in managing the time and dates.

4.4.8 Results Overall

OVERALL EFFICIENCY OF VENDOR TEXPORT

KPI KP KPI WEIGHTER MAXIMUM
SCORE WEIGHTS SCORE SCORE
Fabric sourcing 70 4.8 336 500
efficiency
Timely Delivery 90 4.2 378 500
On Time Shipment 97.79 4.6 449.834 500
Order Fulfillment 60 4.2 252 500
Quality at Delivery 9.24 4.8 44.352 500
Costing 100 4 400 500
First Fit 96.67 3.2 309.344 500
      2169.53 3500
OVERALL EFFICIENCY OF VENDOR TEXPORT   61.99

OVERALL EFFICIENCY OF VENDOR LT KARLE

KPI KP KPI WEIGHTER MAXIMUM
SCORE WEIGHTS SCORE SCORE
Fabric sourcing 80 4.8 384 500
efficiency
Timely Delivery 58 4.2 243.6 500
On Time Shipment 94.2 4.6 433.32 500
Order Fulfillment 93.33 4.2 391.986 500
Quality at Delivery 8.88 4.8 42.624 500
Costing 83.33 4 333.32 500
First Fit 100 3.2 320 500
      2148.85 3500
OVERALL EFFICIENCY OF VENDOR LT KARLE   61.40

OVERALL EFFICIENCY OF VENDOR MODLAMA

KPI KP KPI WEIGHTER MAXIMUM
SCORE WEIGHTS SCORE SCORE
Fabric sourcing 63.33 4.8 303.984 500
efficiency
Timely Delivery 73.33 4.2 307.986 500
On Time Shipment 93.31 4.6 429.226 500
 Order Fulfillment 93.33 4.2 391.986 500
Quality at Delivery 5.45 4.8 26.16 500
Costing 80 4 320 500
First Fit 46.67 3.2 149.344 500
      1928.686 3500
OVERALL EFFICIENCY OF VENDOR MODLAMA   55.11

VENDOR OVERALL
EFFICIENCY
TEXPORT 61.99
LT KARLE 61.40
MODLAMA 55.11

OVERALL EFFICIENCY
64

62

60

58

56

54

52

50
TEXPORT LT KARLE MODLAMA

Chapter- 5 – CONCLUSION
The project resulted in the following:
 Standardized Tool: The project resulted in setting a standardized tool for evaluation of
the performance of the vendors.
 Regular evaluation: The tools will help in evaluating the performance of the vendors on
regular basis for every season.
 Better Allocation: The analysis will help in better allocation of orders to the factories on
the basis of the quantity, quality and facilities of the factory. The allocation would be
completely unbiased and based on facts and figures.
 Overall View: The analysis of the results gives an overall view of the efficiency of the
factories in majorly four areas plan, make, source and deliver. It is very important to
know the performance of the vendors for the overall success of the organization.
 The evaluation helped identify the strong and week areas of the vendors.
ANNEXURES