Supplier Evaluation
Your Supply Chain Manager has assigned you the responsibility of developing a new Supplier Evaluation process for your company. Your company has experienced an unfavorable trend in low productivity as a result of component availability, re-working of product, and increased inventory levels of nonconforming material. Your company cannot seem to effectively measure supplier performance because it doesn’t know which metrics to implement that will drive the right changes.
To make matters worse, your company is working to become ISO9001 certified. ISO9001:2008 requires supplier evaluation and data analyses so this needs to be considered when developing the evaluation process.
Identify the top ten supplier performance criteria you want to use in the evaluation process
Create a Supplier Evaluation template with the key criteria data you want to analyze.
Write a 1,050- to 1,400-word proposal that includes:
•Purpose of a Supplier Evaluation process
•Example of template
•Implementation plan: include who is responsible for collecting data and how you will determine which suppliers will be measured.
•Supplier communication plan to inform selected suppliers of this new process
•Explain how data will be used to drive supplier performance improvements.
Format the paper according to APA standards.
This is the process of assessing and approving potential suppliers through quantitative and qualitative assessments. The purpose is to compile a list of the best suppliers available.
Purpose of a Supplier Evaluation Process
The purpose of a Supplier Evaluation process is to evaluate and monitor supplier performance to identify areas for improvement, reduce supply chain risk, and ensure that suppliers meet the company’s quality and delivery requirements. The evaluation process should be data-driven and objective, focusing on measurable criteria that are essential for the company’s success.
Example of Template
The following Supplier Evaluation template includes key criteria that can be used to evaluate suppliers:
Supplier Name: __________________________ Evaluator Name: __________________________ Date of Evaluation: ________________________
- Quality Performance
- % of non-conforming material
- Number of supplier-related quality incidents
- Number of quality audits completed
- Delivery Performance
- On-time delivery rate
- Lead time performance
- Number of delivery-related incidents
- Cost Performance
- Price competitiveness
- Total cost of ownership
- Cost savings initiatives proposed by the supplier
- Communication and Responsiveness
- Responsiveness to inquiries
- Timely resolution of issues
- Proactivity in communication
- Environmental and Social Responsibility
- Compliance with environmental and social regulations
- Adoption of sustainable practices
- Commitment to social responsibility
Implementation Plan
The Supplier Evaluation process should be implemented by the Supply Chain Manager with the help of a cross-functional team. The team should consist of representatives from quality, purchasing, engineering, and operations departments. The team should review the current supplier base and determine which suppliers will be measured based on their impact on the company’s success.
The team should also identify the sources of data to be used for evaluation, such as supplier performance reports, quality audits, and customer feedback. The team should determine the frequency of evaluations, such as quarterly or annually, and establish a process for evaluating new suppliers before they are approved.
Supplier Communication Plan
The Supplier Evaluation process should be communicated to selected suppliers to ensure that they are aware of the evaluation criteria and the importance of meeting the company’s requirements. The Supply Chain Manager should explain the process to the suppliers, provide them with the evaluation template, and discuss how the data will be used to drive supplier performance improvements. The communication should also include the timeline for the evaluation process, the frequency of evaluations, and the consequences of failing to meet the company’s requirements.
Data-Driven Performance Improvement
The data collected through this process should be used to drive supplier performance improvements. The Supply Chain Manager should analyze the data to identify trends, areas for improvement, and best practices. The team should work with the suppliers to develop action plans to address areas of improvement and monitor their progress over time.
The Supply Chain Manager should use the data to identify the best-performing suppliers and establish strategic partnerships with them. The data should also be used to identify high-risk suppliers and develop contingency plans to mitigate supply chain disruptions.
In conclusion, implementing a Supplier Evaluation process can help the company reduce supply chain risk, improve quality and delivery performance, and increase cost competitiveness. The process should be data-driven, objective, and focused on measurable criteria that are essential for the company’s success. The evaluation process should be communicated to suppliers, and the data collected should be used to drive supplier performance improvements.
