Supplier Evaluation – methods, criteria, and going digital
Supplier Evaluation: just a pain in the ass?
20/04/2021
Welcome to our BLOG!
Last week we started talking about supplier evaluation. Check out our last post on this topic and our series on supplier’s delivery-times to further understand the connection between these two topics and keep optimizing your processes!
So, we already talked about who needs to do a supplier evaluation, and the different certifications that a company can get. We also mentioned the reasons why you would want to do it. But … how the hell do you do it? And how can you minimize the amount of time and money you spend every year on this topic that seems to scare a lot of people of?
How is it done?
It depends. Very roughly explained, your company will have to decide which method and which assessment criteria to use for the evaluation. What is mandatory for you and, what you can choose from, will again, depend on which certificate you are trying to get and which industry you belong to (in the case of the automotive industry for example).
Methods and Criteria
To give you an idea, some of the methods you could choose from are:
However, more important than the method you will be using, are the criteria you will actually be assessing. You might not have a choice when it comes to some of the classic ones like Product Quality or Delivery Reliability, but the companies are encouraged to choose different criteria depending on their unique circumstances. The goals and pursuits of the enterprise regarding its cooperation with suppliers should be the basis for determining the criteria as well as special requirements for the supplier or the product or service to be delivered. Some examples could be:
Make it digital - make it easier:
This whole thing does not have to be a pain in the ass, and you do not have to go all crazy twice a year when it’s time to get it done. Take advantage of the fourth industrial revolution happening around you and get yourself some digital help.Just by using your ERP-System you can start collecting information digitally, which will take a lot of work off your hands. Many ERPs have a specific module designed to carry out a general supplier evaluation, you normally enter the data during the goods income and that same information is used depending on predetermined criteria.
However, you could go even one step further and get yourself a Software that not only collects information digitally but one that is designed to lift the weight of such an important process off your shoulders. Imagine how fast and stress-free your life would be if you could constantly monitor supplier performance, error rates, delivery reliability, and yield, etc?
If you are serious about improving your business having a standard ERP module is probably not enough for you, like 90% of all enterprises using ERP… Having a solution that enables your staff to react according to real time evaluations and to find out about the weaknesses and strengths of each supplier using relatable data will assure that you get certified every time, but most importantly that you will be on top of your quality and supplier management at all times.
Interested in this topic and possible solutions? Check out our partner's Power2Apps solution and ask them to see some cool use-cases for further understanding of the whole thing.
Improving the relationship with your suppliers and easing your staff’s burden while being confident that they are working with accurate information are all cherries that go on top of whatever certification you are trying to get.
What next?
Ok, so you understand why and how to get this evaluation done. What comes next?You have read it several times already, but it is important to remember that after an evaluation there is still work to do. You now know the positives and negatives of your suppliers, now you have the responsibility to use that information to actually improve. Which suppliers are the best for your upcoming processes? Which still have room to improve, and how will you communicate and help them get to where they need to be? Do you maybe have to block a supplier while they improve? And the last but sometimes necessary instance, is it best to let some go?
Collecting enough reliable data, assessing what is actually of importance for your company, asking the right questions and most importantly acting on the results is a never ending process. But using the right tools, it is a process that can be automatized and digitized, so you get all of the benefits with little effort.
We hope you enjoyed this article, stay tuned for and let us know via the contact form if you have specific questions regarding your supplier evaluation.
Until the next time,
your Statistance- team.
