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3 Most Important Reasons to Evaluate your Suppliers

Posted by Anna Dunn on 27/09/2018

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Evaluating your suppliers is beneficial for both your company and the business partners. Effective supplier reviews let you clearly define your needs so that your business partnerships can thrive in a transparent and efficient environment. Here are the 3 reasons for conducting an effective supplier evaluation process:


1. Communication of clear expectations

By clearly defining what is it that you actually need from your suppliers, it will create a layer of transparency and trust. These values are important to foster because if your suppliers know exactly what to expect when doing business with your company, they can deliver at much higher quality. Through effective communication and clear direction to the business partners, they are also more likely to be responsive when it comes to future product and process innovation which fosters efficiency and progress.

Some of the most common fields when it comes to supplier evaluation form can range from quality and delivery, to cost efficiency and environmental consciousness. What your business has to decide is which of those factors are the most important when operating a sustainable production. These factors will then provide a clear guidelines to your suppliers and ease corrective workloads for your team.


2. Improvement in Supplier Quality 

This point certainly goes beyond scoring a company on an evaluation form. Quality in this context is a much broader term that goes beyond product or service quality, but the overall experience working with the business partner. Communication, and response time to complaints from the side of the supplier need to be tracked to make an educated decision whether the business relationship is worth your company’s time and effort.

By evaluating corrective actions encountered with a particular supplier with a consolidated and quantifiable supplier evaluation process, you can make clear decision of whether or not to work with the business partner in the future. This is why we strongly recommend keeping track of all supplier evaluations and corrective actions in one place, which will help you during supplier talks to discuss positives and negatives of your business partnerships.


3. Elimination of unnecessary costs

Performing supplier evaluations provides an extra layer of visibility not only into quality but also into the abyss of product cost. Your costs in the end are not only reliant upon the quality of the product but also operations of your suppliers. If the delivery is constantly late and/or the goods that arrive at your location are constantly damaged, this also provides another unfortunate opportunity for you to lose out on sales from your customers.

Providing exact reasons for potentially changing or halting your business relationships will compel your supplier to change their own operations. Even if the suppliers at hand may be quite cheaper than other options out there, it may be more cost effective for you to switch to another more reliable business partner but save on labor resources and ensure customer satisfaction.

In the end there are quite a few reasons to adopt an efficient supplier evaluation process. To make sure that you get the best results, we recommend keeping all evaluations on one platform rather than spreading the process onto different channels like endless Excel sheets and even paper forms.

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Tags: risk management, Manufacturing Audit, Supplier Relationship Management Software, SRM Software, SRM Benefits, Supplier Evaluation, Vendor Reviews