While many companies can easily identify the criteria needed for a supplier evaluation, it can be a challenge to follow the practices needed to guarantee its success. The following guidelines can help your company retain its focus throughout your evaluation. Supplier evaluations serve as an invaluable tool for your business.
By conducting them regularly, your company can gain greater insight into operations, proactively identify opportunities for growth, lower risks, streamline production timelines, eliminate unnecessary expenses, and bolster the performance of your suppliers. These competitive benefits cannot be overstated. By following the appropriate protocols within a larger framework, it can be a simple process for companies and suppliers alike, allowing both to better understand their strengths and shortcomings, and encouraging both to work together to build a stronger, more prosperous partnership.
Want more on supplier evaluation and other procurement topics? Thomas has an entire library of technical guides available to get you up to speed on procurement , top suppliers , and a range of other industrial topics so you can succeed in your career. Those more interested in sourcing can start evaluating new suppliers immediately on our supplier discovery page.
Guides Chris Feldsine Share:. Select From Over , Industrial Suppliers. The pricing is ultimately just one of the factors to consider when choosing suppliers. Can the supplier consistently provide high quality goods?
A good basis for this is to ask how long they have been working with their other clients. If they have long standing relationships with other clients, it is a good sign that they can continuously deliver over time. As much as company culture is important to your business, it should also manifest in your supplier.
Values such as speed, quality, excellence, innovation, and reliability are existent in trustworthy companies and you want to be sure that the same can be said about your own suppliers. Are their processes environment friendly and are they ethical in the way they treat their employees? Are they capable of handling growth and able to expand as your business expands too?
Keep all the information you gather about your suppliers in an easy-to-understand table format, and it should be easy for you to identify the supplier that suits your needs perfectly. Start my free trial now. All rights reserved. Terms and conditions, features, support, pricing, and service options subject to change without notice. By accessing and using this page you agree to the Terms and Conditions. Privacy Statement. Product Multichannel Sales Sell across different sales channels with ease.
Companies that regularly evaluate the performance of their suppliers find that they have better visibility into supplier performance, remove hidden costs, reduce risk, get a competitive advantage by reducing order cycle times and inventory, gain insight on how to elevate on their supply base, and align practices between the company management and the suppliers.
When companies have no or little knowledge on how their suppliers are performing, supplier management tends to be based on the game of guesswork with the factor of ambiguity. With the simple process of measuring the performance of the suppliers can help improve the overall performance of the company. This improvement can be even more dramatic and lucrative in nature when companies award additional business on the yardstick of suppliers meeting their performance goals.
The sustainable process of the procurement is full of potential risks that can originate from suppliers with regards to the aspect of corporate social responsibility. Some of these risks can be avoided through the way of better and clear communication channel between customers and suppliers. With the better understanding of the supplier performance and supplier business practices, customers can help suppliers drive waste and inefficiency out of the business processes that result in the higher-quality suppliers and lower costs of the goods procured.
Through the process of Supplier Evaluation, the company is able to set a threshold for its suppliers that can result in the higher-quality results. In the ideal case scenario, the suppliers should run their business operations in alignment with their customer sharing the similar business ethics, expect similar levels of excellence, show commitment towards the aspect of corporate social responsibility, and work towards the continuous improvement of their operations.
With the proper insights into the performance of the suppliers and their overall business practices helps to reduce the business risk , particularly when the companies increase their dependency on their key suppliers. Risks can range from financial to operational in nature and increase with geographic distance. The main goal of the Supplier Evaluation process should be the improvement of the performance of the suppliers. While simply measuring their performance has a positive effect, the supplier Evaluation can be more effective when it leads to continuous improvement activities and actual performance improvement of the suppliers.
Follow-up activities, such as supplier training and development , and counteractive actions to address the evaluation findings are the best ways to attain measurable and positive results.
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