Supplier assessment
The firm has select suppliers that are capable of providing the required specifications.
Bailey et al (2008), have proposed five methods that can be used to assess the capability of a supplier. The supplier has to look at past performance, supplier’s reputation, visit and appraisal, third–party certification, and evaluation of samples. Supplier can consider a number of variables that are outlined
here (according to Chopra, 2007)
Supplier evaluation
- Main aims of supplier evaluation
- To develop win-win relationships with suppliers
- To have transparent and clear procedure of supplier measurement
- To ensure long term relationship with suppliers
- To support the procurement function with accurate information
Why supplier evaluation?
Supplier evaluation methods or models
According to the Institute of Supply Management, and Weber’s study, three fundamental models that can be used to identify and evaluate suppliers.
- Categorical model: This model can be used by small firms; and other firms which are in a process of developing supplier evaluation systems. It is mostly a manual system; relying on different personnel to input data.
- Weight – point model: This model can be used by most firms. It is a flexible system that combines both qualitative and quantitative factors in one single system.
- Cost – ratio model: This is the model that can be used by large firms; firms with a large supplier base. The model provides a total based approach. It requires high investment costs.
Categorical model
Weight – point model
Cost – ratio model
