7 steps to develop a supplier evaluation and

7 steps to develop a supplier evaluation and selection survey
1. Identify supplier evaluation categories
2. Assign a weight to each evaluation category
3. Identify and weigh subcategories
4. Define a scoring system for categories and subcategories
5. Evaluate supplier directly
6. Review evaluation results and make selection decision
7. Review and improve supplier performance continuously
Sourcing alternatives PAGE 255
 Manufacturer vs distributor
 Local or national or international suppliers
 Large or small suppliers
 Multiple or single sourcing PAGE 256
Reducing supplier evaluation and selection cycle time (tools and approaches)
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 Mapping the current supplier evaluation and selection process process mapping involves the identification of steps
activities, time and cost involved in a process. Once the current evaluation and selection process is understood,
opportunities for improvement should become evident
 Integrating with internal customers This can be achieved by purchasing collocating physically with marketing, engineering
and operation to gain insight early into expected supply requirements.
 Data warehouse with supplier information consists of easy to access supplier data and information of potential suppliers,
history of current suppliers and any other information that supports a faster selection process.
 Third-party support can range from consultants to sourcing software providers or knowledge providers. In the area of risk
management, there are many providers that can help when buyers are doing due diligence
 New organizational design features commodity teams to manage important purchase requirements
 Preferred supplier list suppliers should earn their place on the list as preferred, certified or partnered by consistently
providing the best P&S to the purchaser.
 Electronic tools many software providers offer either full suits or products for supply managers or standalone tools, such
a e-RAs. These tools reduce supplier evaluation and selection time.
 Predefined contract language and shorter contracts progressive supply managers work with their legal group to develop
pre-established contract language that can be cut and pasted during supplier negotiation
List and explain the key supplier evaluation criteria.
Purchasing, sourcing and supply professionals usually evaluate potential suppliers across multiple categories using their own
selection criteria with assigned weights.
1. Management capabilities: management runs the business and makes the decisions that affect the competitiveness of the
supplier.
2. Employee capabilities: does the supplier have a highly trained, stable and motivated workforce that provides during
periods of labour shortages?