Blacklisting of Suppliers
Once contract negotiation is over and an agreement is reached, the procurement department should track the supplier’s performance over a period of time.
The supplier performance evaluation should focus on quantitative measures to assess the supplier’s performance in areas of quality, responsiveness, cost, and delivery.
Table of Content
Supplier performance evaluation is a process of evaluating, measuring, and monitoring supplier performance for the purpose of mitigating risks and driving continuous improvement.
Non-conformance should be taken note of and the costs associated with it should be recorded. Non-conformance refers to complaints regarding poor-quality items, poor delivery, frequent price increases, unethical practices, not adhering to procurement policy and procedures, frequent rejects, poor lead time, labor disputes, poor services, lack of technical knowledge, etc.
These incidences should be recorded against each supplier and as per performance evaluation procedures. Warning notices should be sent as and when required. Recording non-conformance helps in arriving at the total cost of doing business with the supplier, which helps in comparing and evaluating suppliers.
In contrast to supplier performance evaluation, which focuses on supplier management and development, blacklisting refers to a supplier policy that provides criteria for excluding suppliers from doing future business due to serious issues in meeting contract terms.
In general, blacklisting is meant to prevent those suppliers, who are fraudulent and unethical, from bidding for future business (rather than those who fail due to incompetence). Blacklisting is warranted due to wrong acts/cheating of suppliers, not due to unintentional mistakes, and much less due to failure on quality commitments.
Reasons for Blacklisting of Suppliers
The reasons for blacklisting of suppliers could be:
- Wrongful acts
- Intention to cheat
- Misrepresentation of facts
- Unlawful gains
- Unlawful activities, such as non-compliance to regulatory norms, non-adherence to minimum wage laws, violation of child-labor laws, non-compliance to health and safety parameters, etc.
- Malpractices
- Not respecting confidentiality terms
- Not following disclosure norms
- Misconduct
- Unprofessional and unethical behavior
Reasons for Supplier Suspension
Suppliers may also be suspended, instead of blacklisted, for lesser offenses like repetitive failures on meeting quality and other contractual commitments. Reasons for supplier suspension could include:
- Serious failure in executing any contract
- Repetitive transgression of contract terms
- Frequent quality issues
- Failure to execute after winning orders
- Unacceptable delays in deliveries
- Unsatisfactory execution of the contract
- Repetitive non-performance
Business Ethics
(Click on Topic to Read)
- What is Ethics?
- What is Business Ethics?
- Values, Norms, Beliefs and Standards in Business Ethics
- Indian Ethos in Management
- Ethical Issues in Marketing
- Ethical Issues in HRM
- Ethical Issues in IT
- Ethical Issues in Production and Operations Management
- Ethical Issues in Finance and Accounting
- What is Corporate Governance?
- What is Ownership Concentration?
- What is Ownership Composition?
- Types of Companies in India
- Internal Corporate Governance
- External Corporate Governance
- Corporate Governance in India
- What is Enterprise Risk Management (ERM)?
- What is Assessment of Risk?
- What is Risk Register?
- Risk Management Committee
Corporate social responsibility (CSR)
Lean Six Sigma
- Project Decomposition in Six Sigma
- Critical to Quality (CTQ) Six Sigma
- Process Mapping Six Sigma
- Flowchart and SIPOC
- Gage Repeatability and Reproducibility
- Statistical Diagram
- Lean Techniques for Optimisation Flow
- Failure Modes and Effects Analysis (FMEA)
- What is Process Audits?
- Six Sigma Implementation at Ford
- IBM Uses Six Sigma to Drive Behaviour Change
Research Methodology
Management
Operations Research
Operation Management
- What is Strategy?
- What is Operations Strategy?
- Operations Competitive Dimensions
- Operations Strategy Formulation Process
- What is Strategic Fit?
- Strategic Design Process
- Focused Operations Strategy
- Corporate Level Strategy
- Expansion Strategies
- Stability Strategies
- Retrenchment Strategies
- Competitive Advantage
- Strategic Choice and Strategic Alternatives
- What is Production Process?
- What is Process Technology?
- What is Process Improvement?
- Strategic Capacity Management
- Production and Logistics Strategy
- Taxonomy of Supply Chain Strategies
- Factors Considered in Supply Chain Planning
- Operational and Strategic Issues in Global Logistics
- Logistics Outsourcing Strategy
- What is Supply Chain Mapping?
- Supply Chain Process Restructuring
- Points of Differentiation
- Re-engineering Improvement in SCM
- What is Supply Chain Drivers?
- Supply Chain Operations Reference (SCOR) Model
- Customer Service and Cost Trade Off
- Internal and External Performance Measures
- Linking Supply Chain and Business Performance
- Netflix’s Niche Focused Strategy
- Disney and Pixar Merger
- Process Planning at Mcdonald’s
Service Operations Management
Procurement Management
- What is Procurement Management?
- Procurement Negotiation
- Types of Requisition
- RFX in Procurement
- What is Purchasing Cycle?
- Vendor Managed Inventory
- Internal Conflict During Purchasing Operation
- Spend Analysis in Procurement
- Sourcing in Procurement
- Supplier Evaluation and Selection in Procurement
- Blacklisting of Suppliers in Procurement
- Total Cost of Ownership in Procurement
- Incoterms in Procurement
- Documents Used in International Procurement
- Transportation and Logistics Strategy
- What is Capital Equipment?
- Procurement Process of Capital Equipment
- Acquisition of Technology in Procurement
- What is E-Procurement?
- E-marketplace and Online Catalogues
- Fixed Price and Cost Reimbursement Contracts
- Contract Cancellation in Procurement
- Ethics in Procurement
- Legal Aspects of Procurement
- Global Sourcing in Procurement
- Intermediaries and Countertrade in Procurement
Strategic Management
- What is Strategic Management?
- What is Value Chain Analysis?
- Mission Statement
- Business Level Strategy
- What is SWOT Analysis?
- What is Competitive Advantage?
- What is Vision?
- What is Ansoff Matrix?
- Prahalad and Gary Hammel
- Strategic Management In Global Environment
- Competitor Analysis Framework
- Competitive Rivalry Analysis
- Competitive Dynamics
- What is Competitive Rivalry?
- Five Competitive Forces That Shape Strategy
- What is PESTLE Analysis?
- Fragmentation and Consolidation Of Industries
- What is Technology Life Cycle?
- What is Diversification Strategy?
- What is Corporate Restructuring Strategy?
- Resources and Capabilities of Organization
- Role of Leaders In Functional-Level Strategic Management
- Functional Structure In Functional Level Strategy Formulation
- Information And Control System
- What is Strategy Gap Analysis?
- Issues In Strategy Implementation
- Matrix Organizational Structure
- What is Strategic Management Process?
Supply Chain