1. Copyright © 2013 N.F. Smith & Associates, L..P. All Rights Reserved. FS.E.2013.04
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Vendor Application
Smith’s vendor screening process
evaluates suppliers based on their
ability to deliver products that meet
our high standards of quality. The first
step in the vendor screening process
is completion of Smith’s Vendor Appli-
cation. Vendor Applications require
that the supplier provide comprehen-
sive background information, includ-
ing management contacts, financial
information, and trade and bank ref-
erences.
Vendor Audits
In some cases, Smith requires height-
ened evaluation of a potential supplier
to confirm its ability to meet our stan-
dards for service, delivery, and qual-
ity. When deemed necessary by our
supply chain experts, Smith conducts
an onsite visit to supplier facilities. On-
site visits include an end-to-end evalu-
ation of quality management systems,
policies and procedures, and overall
business operations.
Management Approvals
To ensure that new vendors have suc-
cessfully passed the screening pro-
cess, they must be approved by the
appropriate Smith Trading Manager,
Quality Manager, Credit Manager,
and Corporate Security before they
are assigned an official Smith ven-
dor number. Only vendors with an
assigned Smith vendor number can
receive purchase orders from Smith.
SecureSource
The SecureSource program establishes standards and practices for Smith’s purchasing, sales, and operations teams to
assure the highest quality products, every time. At Smith, we believe that effective vendor screening and management
not only serve to maintain reliable flow of quality product, but also provide a first line of defense against counterfeit
components.
Vendor Screening
Smith sources components from qualified vendors you can trust. Our vendor
screening, through our SecureSource program, assures that we receive only top-
quality parts. We understand that you need the security of knowing that vendors
have been carefully screened when you are purchasing components on the open
market. Smith gives you that security. All of our suppliers are formally selected
and continually evaluated. Smith’s vendor screening process and ongoing vendor
management allow us to qualify, classify, monitor, and measure vendors.
Vendor Management
Once a vendor is approved and assigned a vendor number, Smith uses an internal Vendor Rating System (VRS) to manage
vendor performance. Smith maintains evidence of qualification (approval) and ongoing evaluations as part of each vendor’s
quality records.
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2. Smith’s assurance of quality business practices is a comprehensive framework called SmithSecure.
Bringing together the quality initiatives we’ve developed over the years with best practices across
the industry, SmithSecure includes four core programs: SecureTest, SecureSource, SecureService,
and SecureTech.
Smith’s VRS is integrated into our internal trading and operational platforms, which gives global visibility to all Smith per-
sonnel of our approved suppliers and their current ratings. Vendors are rated as preferred, approved, conditional or no
trade. Each rating is represented by a symbol in our vendor rating system:
Expanded metrics on vendor performance are also available to Smith’s sales and purchasing personnel through the VRS.
These include:
• Vendor Type
• Number of Offers
• Number of PO Lines
• Late Deliveries
• Discrepancies or Returns for Minor Nonconformance
• Returns for Major Nonconformance
• Purchases Last Year ($)
• Purchases Y-T-D ($)
Global Supplier Base
We have developed relationships with approved sources all over the world to
meet the ever-changing requirements from our customers. In fact, our network
of open market contacts is the largest in the industry. Our account experts
engage this network from our global offices. Global visibility of our Vendor
Rating System allows us to source and deliver quality products from reliable
vendors anywhere, anytime.
Certifications
Preferred Approved Conditional No Trade
Preferred: High performance, full traceability, favorable terms
Approved: Proven vendor with limited terms
Conditional: Unproven or promising vendor with limited transaction history or limited traceability
No Trade: Trading prohibited - inferior quality/poor performance