10 Cs SUPPLIER EVALUATION

Supplier evaluation is a term used in business and refers to the process of evaluating and approving potential suppliers by quantitative assessment. The purpose of supplier evaluation is to ensure a portfolio of best in class suppliers is available for use. Supplier evaluation is also a process applied to current suppliers in order to measure and monitor their performance for the purposes of reducing costs, mitigating risk and driving continuous improvement.

Competency

First, look at how competent this supplier is. Make a thorough assessment of the supplier's capabilities measured against your needs, but then also look at what other customers think. How happy are they with the supplier? Have they encountered any problems? And why have former customers changed supplier?Look for customers whose needs and values are similar to yours, to ensure that the information you gather is relevant to your organization.

Capacity

The supplier needs to have enough capacity to handle your firm's requirements. So, how quickly will it be able to respond to these, and to other market and supply fluctuations?Look at all of the supplier's resources, too. Does it have the resources to meet your needs, particularly when commitments to other clients are considered? (These resources include staff, equipment, storage, and available materials.)

Commitment

Your supplier needs to provide evidence that it's committed to high quality standards. Where appropriate, look for quality initiatives within the organization, such as ISO 9001 and Six Sigma .The supplier also needs to show that it is committed to you, as a customer, for the duration of the time that you expect to work together. (This is particularly important if you're planning a long-term relationship with the supplier.)

You'll need evidence of its ongoing commitment to delivering to your requirements, whatever the needs of its other customers.

Control

Query how much control this supplier has over its policies, processes, procedures, and supply chain.How will it ensure that it delivers consistently and reliably, particularly if it relies on scarce resources, and particularly if these are controlled by another organization?

Cash

Your supplier should be in good financial health. Cash-positive firms are in a much better position to weather the ups and downs of an uncertain economy.So, does this supplier have plenty of cash at hand, or is it overextended financially? And what information can the supplier offer to demonstrate its ongoing financial strength?

Cost

Look at the cost of the product that this supplier provides. How does this compare with the other firms that you're considering?Most people consider cost to be a key factor when choosing a supplier. However, cost is in the middle of the 10 Cs list for a reason: other factors, such as a commitment to quality and financial health, can potentially affect your business much more than cost alone, particularly if you will be relying on the supplier on an ongoing basis.

Consistency

How will this supplier ensure that it consistently provides high quality goods or services?No one can be perfect all of the time. However, the supplier should have processes or procedures in place to ensure consistency. Ask this supplier about its approach, and get a demonstration and a test product, if possible.

Culture

The best business relationships are based on closely matching workplace values  . This is why looking at the supplier's business culture is important. For example, what if your organization's most important value is quality, and your main supplier cares more about meeting deadlines? This mismatch could mean that it's willing to cut corners in a way that could prove to be unacceptable to you.Use the Cultural Web as a guide to organizational culture.

Clean

This refers to this supplier's commitment to sustainability, and its adherence to environmental laws and best practices. What is it doing to lighten its environmental footprint? Ask to see evidence of any green accolades or credentials that it's earned.Also, does this supplier treat its people – and the people around it – well; and does it have a reputation for doing business ethically?

Communication

Query how the supplier plans to keep in touch with you. Will its proposed communication approaches align with your preferred methods? And who will be your contact person at this firm?It's also important to find out how the supplier will handle communications in the event of a crisis. How quickly will it notify you if there's a supply disruption? How will that communication take place? And will you be able to reach senior people, if you need to?