Effective Supplier Assessment and Evaluation: Why is it Important?

You’ve awarded a supplier from the supplier sourcing pool, hoping to turn your product idea into reality in the foreseeable time. But different from what you’ve expected, your supposed-to-be-ideal supplier is not delivering the results you wanted. Problems are swamping to you: delayed deliveries, surging spending, repeated supplier management problems, just to name a few. Seeing this, you may wonder, where is going wrong?

To be honest, all these could be boil down to one thing: not assessing or evaluating your supplier in the project process. So, what is supplier assessment or evaluation, and why is it important to your business? Let’s break it down.

What is supplier assessment or evaluation?

Note: Supplier assessment or evaluation could happen when you’re sourcing a supplier and when you already engage with a supplier. In this post, we mainly focus on the latter.

It’s actually quite easy to understand the concept of supplier assessment: you’ve settled down to a so-far satisfying supplier, and the next thing you do is to make sure that your supplier is doing what you expect them to do. Then comes the question, how can you make sure that the other party is delivering what you need?

This is where supplier assessment jumps in.

By assessing your suppliers with quantitative measures, you’ll see what improvement can be done on your suppliers’ side, and address them accordingly to improve the overall supply chain performance. Read on for more information about the benefits of supplier assessment or evaluation.

Why is supplier assessment so important?

In a nutshell, supplier assessment along the project process is a great way to mitigate risks, reduce costs, and drive the overall supply chain performance. To break its benefits down:

1) Align the best interest for both parties

When assessing or evaluating your supplier’s performance, it’s important that both parties acknowledge the critical requirements, timeline and deliverables of the project.

That said, interest of both parties should be perfectly aligned so you can move on with the cooperation. To be more exact, your company or organization is alert in your job, and your supplier will be alert in delivering the right quality goods. It’s a win-win approach.

2) Detect and address weaknesses in supplier performance

By assessing or auditing your suppliers, you have the resources to find out what the improvement areas are in the supply chain, and address to the weak links accordingly. To make it happen, you need to create a reliable quantitative measurement system to find out what needs to be improved, and figure out appropriate methods to get them fixed.

If you don’t have a supplier assessment system just yet, don’t worry, here is our supplier assessment service, click and see how we can help.

3) Bridge the communication gap

The last thing you want is to get the information only at the last minute when it’s too late to do anything to save your project. By assessing your supplier along the way, you have more opportunities to communicate with your suppliers. Such communications allow you to be more down-to-earth, and your supplier understand your needs better.

4) Identify new business opportunities

Whichever way you’re doing the supplier assessment, questionnaire, interview, on-site visit, you have more opportunities to communicate with staff from the supplier side. This would give you more windows to think about what more can be done for your project, and possibly new business opportunities could arise.

5) Ongoing fruitful supplier relationship

With the best interest of both parties aligned, suggestions for development for the both sides implemented, you and your supplier are on the right path towards mutual benefits.

In that, you can expect mutual trust and health dependency generating from such a health supplier relationship. There’s no harm in grooming a mutual beneficial supplier relationship, and you can always approach the same supplier for future projects, which would save you tons of time re-selecting potential suppliers from the supplier pool.

All in one solution: Supplier Assessment Platform

If you’re not sure when you should assess your supplier, how you should assess them, and what areas you should pay extra attention to when doing so, why not have a look at our supplier assessment service?

With the help from the supplier assessment platform, you have direct insight into how your supplier is doing now, and what can be done to make the most out of your supplier relationship. You don’t need to know much about the quantitative measurement scales, or do the on-site visit to get the accurate information, because we’re doing it for you.

Here is how the supplier assessment platform works to help you:

1) You choose one of the services and place the booking online, when you decide to assess or audit your supplier. (Or you can just reach out to see what other options are available.)

2) Our assessors evaluate your supplier’s capability on-site with quantitative measurement scales.

3) We submit finding and review the report with you. If you need, we’ll also provide you with supplier engagement and/or business suggestions.

Check the sample report here if you need extra information.

Should you have any question regarding supplier assessment, feel free to reach out or leave us your comment. We’d be glad to help.

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