Supplier assessment can seem complex if starting with little to no experience, as there are several different methods that can be used. I have seen a lot of companies where suppliers are being used to blame for any issues, and almost considered as the enemy, whereas in reality they should consider them as a long term business partner.
Items for Supplier Assessment
As mentioned earlier, then there are several different methods to asses or evaluate your suppliers. There are some basic elements that need to be assessed for any supplier before you start work with them.
- Competency: Are they capable to deliver what you need.
- Capacity: Are they able to meet current and future needs in terms of capacity, also how quickly will they be able to react on new orders.
- Commitment: Is there commitment from the supplier to support you long term, and are there other costumers they will prioritize before you. This could for example be the case if you are a small business compared to their other costumers.
- Control: How much control does the supplier have on documents, procedures etc. Also if they outsource some of the work, their control of sub suppliers needs to be considered.
- Cash: What is the economic health of the company, they need to be in a position to withstand up and down turns to ensure continues supply to your company.
- Cost: How much does their product or service cost compared to other suppliers.
- Consistency: How does the supplier ensure consistency in the product they supply.
- Communication: What will be the way of communication and who will be the point of contact, and how can something be escalated to senior people if needed.
Some of the next steps would be to establish KPI’s, group suppliers, establish evaluation method etc.
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