Gradually Evaluate Suppliers

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Gradually Evaluate Suppliers
Wandono, Ardian Uki, Management Consultant, Indonesia

There are many suppliers in our company. When we were audited by a certification body, the auditor recommended to gradually evaluate suppliers. He got it as a observation finding. Therefore, how to evaluate the suppliers gradually? Any suggestion?

Vendor Rating Procedure
Vendor rating is an exercise that needs to be practised at regular intervals, like every quarter or every year as per your company demands.
To start with process, make some standard format and give weightage to following criteria:
- Quality = 30%
- Delivery terms and on time delivery = 30%
- Price = 20%
- After delivery services = 20%
Now make some standard formulas for each of this:
- Your Vendor Quality Vq = Acceptable Quantity / Total Quantity Supplied
- Vendor Delivery Vd = On Time Delivery / Total Deliveries
- etc
Finally a standard formula i.e.:
Total Rating = respc weights * Calculated value above = Wq * Vq + Ws * Vs + ...
Once you put this standard format in any programming software or even MS Excel, separate the vendors accordingly and give them ratings.
Push more business to highly qualified vendors and push the lower one to upgrade/improve. Whereas below a particular level, you won't do any business with them anymore!
This should solve your problem.



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