Approved Supplier

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What is Approved Supplier?- Definition

An approved supplier is defined as follows: A supplier who has been successful in a government, consortium, or national tender exercise for a particular service or a specific range of items/products. All ongoing business for those services/items should be contracted to the "Approved" supplier.

Approved supplier

Understanding Approved Supplier List

All procurement organizations maintain lists that associate the items and services they buy with the companies who supply them, either formally or informally. Data stored in a controlled, global repository containing relevant details about each ship-from/ship-to/item relationship, is known as an Approved Supplier List (ASL). 

This repository includes information about all suppliers with business statuses ranging from fully Approved (the supplier has demonstrated the ability to satisfy rigorous quality, cost, and delivery requirements over a sustained period) to Debarred (no business is allowed with this supplier), or New if you have never placed a purchase order with the supplier. 

Approved Vendors List (AVL), also known as Approved Supplier List (ASL) in some circles, is a list of the suppliers approved for doing business. The AVL is usually created by procurement or sourcing and engineering personnel using a variety of criteria such as technology, the functional fit of the product, financial stability, and past performance of the supplier.

Goals of Approved Supplier 

Through maintenance of the Approved Supplier List the following goals are realized:

  • Supports Supplier Certification programs by providing a single store of information regarding a supplier's current status.
  • Helps design engineers achieve higher quality designs at a lower total cost through the re-use of preferred suppliers in new designs. 
  • Avoids supply base proliferation or unnecessary design dependence on 'difficult' suppliers.
  • Eliminates redundant sourcing efforts within departments, and across organizations. 
  • Facilitates a more global approach to contract negotiation.
  • Provides immediate procurement visibility when a supplier is assigned an unfavorable status. This 'early warning' can help prevent problem replication in multiple organizations.
  • Provides storage for general data attributes that are unique to the supplier/item intersection.
  • Maintains lists of supplier 'candidates' by commodity or item for future consideration.

Explore Additional Resources to Know More

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