Supplier evaluation

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Supplier evaluation is a term used in business and refers to the process of evaluating and approving potential suppliers by factual and measurable assesment. The purpose of supplier evaluation is to ensure a portfolio of best in class suppliers is available for use.[1]

[edit] Process

Supplier evaluation is a continual process within purchasing departments[2] and forms part of the pre-qualification step within the purchasing process[3]. It often takes the form of either a questionnaire or interview and includes appraisals of various aspects of the suppliers business including capacity, financials, quality assurance, organizational structure and processes and performance.[4]. Based on the information obtained via the evaluation a supplier is scored and either accepted or rejected as one which can be used to procure materials or services from. If rejected the supplier is generally not made available to the assessing companies puchasing team. Once approved, a supplier may be reevaluated on a periodic, often annual, basis.[5].

[edit] Benefits and Drawbacks

There are various benefits associated with an effective supplier evaluation process , generally this is associated with mitigation against poor supply and benefits typically include resultant sourcing from suppliers that provide high standards of product and service levels whilst offering sufficient capacity and business stability.

Associated problems with supplier evaluation include resource and cost commitments in establishing and maintaining a system, challenges with gathering data and subjective scoring which may result in in-accurate assessment[6]


[edit] References

  1. ^ Purchasing Performance: Measuring, Marketing, and Selling the Purchasing ... By Derek Roylance
  2. ^ Purchasing Principles and Management By Peter Baily
  3. ^ The Chartered Institute of Purchasing & Supply - Evaluate/Select Suppliers
  4. ^ ยป Using effective supplier appraisal techniques to improve the supply chain. - Strategy squared
  5. ^ Retail Product Management: Buying and Merchandising By Rosemary Varley
  6. ^ Best Practice Procurement: Public and Private Sector Perspectives By Andrew Erridge, Ruth Fee, John McIllroy