Establishment And Evaluation Of Supplier Selection Index System For Y Company’s Medicine Purchase

With the improvement of people’s living standard, and the Chinese social ageing trend,people pay continuously attention to their family’s health as well as their own. TCM medicineand nutrition industry has also been rapidly developed. With the rapid development and thefierce competition of the TCM medicine and nutrition industry, especially the growingcompetition in the Chinese herbal medicine resources territory, it put forward higherrequirements to the Purchase Department of the TCM medicine and nutrition agriculturalproduction enterprises. Facing a rapidly growing Chinese herbal medicine resources market ofthe good and bad intermingled as well as the price rising, it is a problem which need to besolved by the business executives of the enterprises, how to adopt a scientific and quantitativeChinese herbal medicine supplier evaluation and selection system to choose the supplier in afair, efficient and reasonable way. And this system should not only balance the needs toimprove quality of the medicine and to reduce procurement costs, but also fully reflect the bidadvantage of the good long-term cooperation suppliers and prevent the staff of the purchasingdepartment from corruption and fraud.Firstly, this article elaborates that as a large-scale medicinal agricultural productionenterprise, the lowest bid evaluation method or the comprehensive evaluation method that Ycompany once adopted has encountered all kinds of malpractices in today’s increasinglycompetitive, counterfeit and shoddy products increasingly rampant market. So it is necessaryto establish a scientific and quantitative Chinese herbal medicine suppliers selection andevaluation system. Secondly, this article analyzes all kinds of related factors that influence thecompany’s decision about suppliers selection and divides these factors into security factorsand decision factors according to the property whether to bring effect to the future cash flowof the enterprise. On this basis, the article puts forward comprehensively utilizing the Delphimethod, analytic hierarchy process, the theory of value engineering and other scientificanalysis method to establish a scientific selection and evaluation index system to the suppliers.Furthermore, in order to reflect the influence of the execution effect that the long-termcooperation suppliers have brought about by carrying out the contract with Y company in theprevious years, this article bring in the additional coefficient about the suppliers’ executioneffect to the Chinese herbal medicine supplier evaluation and selection system. Thisadditional coefficient can help establishing a kind of incentive mechanism related to theexecution effect about the cooperation suppliers’ carrying out the contract, and help to choosethe best qualified supplier in a scientific, objective reasonable method. Thirdly, the article elaborates in detail the process how to comprehensively utilizing theDelphi method, AHP method and value engineering theory to evaluate and choose the bestqualified Chinese herbal medicine supplier, combined with the purchasing selection exampleof honeysuckle supplier. Last but not the least, the article puts forward the corresponding riskcontrol measures to the weak link, by risk identification and risk assessment to theimplementation process of the Y company’s Chinese herbal medicine supplier evaluation andselection system. And this contributes to consummate the execution and management ofevaluation and selection system, and to improve the performance of the supplier selection.