Supplier Selection and Evaluation

  • Detailed Description

Factors Influencing Supplier Selection


Suppliers belong to an open system of the supply chain, so their selection is also influenced by various economic, political, and other factors.


1.Quality factors

Quality is the foundation of supply chain survival, and the value of a product's use is based on product quality. It determines the quality of the final consumer goods and affects the market competitiveness and market share of the product. Therefore, quality is an important factor in selecting suppliers.


2. Price factor

Low prices mean that enterprises can reduce their production and operation costs, improve their competitiveness and increase profits, and play a significant role in selecting suppliers. However, the lowest priced supplier may not necessarily be the most suitable, and many factors such as product quality, delivery time, and transportation costs need to be considered.


3. On time delivery factors

Whether the products can be transported to the project site on time and at the agreed time and location directly affects the project progress, and even affects the project acceptance. Therefore, when selecting a supplier, whether the delivery is timely and whether it can meet the project schedule requirements is also a major factor in selecting a supplier.


4. Other factors affecting

In addition to the three main factors mentioned above, the selection of suppliers also includes factors such as design ability, special process ability, overall service level, and project management ability.


Principles for selecting suppliers


The basic principles to be followed by developing suppliers are the "Q.C.D.S" principles, which include quality, cost, delivery, and service.


Among these four factors, quality factor is the most important. Firstly, it is necessary to confirm whether the supplier has established a stable and effective quality assurance system, and then confirm whether the supplier has the equipment and process capabilities to produce the specific products required. The second is cost and price. It is necessary to use the Value engineering method to analyze the cost of the products involved, and achieve cost savings through win-win price negotiations. In terms of delivery, it is necessary to determine whether the supplier has sufficient production capacity, sufficient human resources, and the potential to expand production capacity. The last and most important point is the support and sustainability of the supplier's pre-sales and after-sales services.


Steps for supplier selection


Suppliers play an important role in the supply chain, and the selection mechanism of suppliers is diverse. Therefore, Evernew provides a detailed analysis of the internal and external environment of the enterprise when helping enterprises choose suppliers according to local conditions. Based on the long-term development strategy and core competitiveness of the enterprise, it selects theories and methods that are suitable for the enterprise or industry, and formulates corresponding implementation steps and rules.


1. Establish a supplier selection team

Control and implement supplier evaluation


2. Analyze the market competition environment

Analyze the current product needs, types, and characteristics of the enterprise to confirm customer needs and whether it is necessary to establish a supply relationship. If a supply relationship has been established, it is necessary to confirm the necessity of changing the supply cooperation relationship based on changes in demand, analyze the current situation of existing suppliers, and summarize the problems existing in the enterprise.


3. Establish goals for supplier selection

Determine how the supplier evaluation process is implemented and establish substantive objectives.


4. Establish supplier evaluation standards

The supplier evaluation index system is the basis and standard for enterprises to comprehensively evaluate suppliers.

The evaluation of suppliers in different industries, enterprises, product requirements, and environments should be the same, but the evaluation criteria for suppliers should involve the following aspects: supplier performance, equipment management, human resource development, quality control, cost control, technical development, customer satisfaction, delivery agreements, etc.

When determining the criteria for selecting suppliers, consider short-term and long-term standards, combine the two to make the selected standards more comprehensive, and then use the standards to evaluate suppliers, ultimately finding the ideal supplier.


5. Supplier Participation

Engage suppliers in the design process of selection to confirm their desire to achieve higher levels of performance.


6. Supplier selection

Investigate and collect comprehensive information on supplier production operations. On the basis of collecting supplier information, use certain tools and technical methods to select suppliers.


7. Achieve cooperation

In the process of implementing supply cooperation relationships, market demand will also constantly change. Evernew can modify the supplier selection criteria in a timely manner according to actual needs, or restart supplier evaluation and selection. When re selecting suppliers, give new and old suppliers enough time to adapt to changes.

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