Supplier evaluation is the systematic process of analyzing the business partners in a company’s supply chain to identify those that deliver the best performance in terms of quality, reliability, cost, and sustainability. This evaluation goes beyond the quality of products or services and includes various criteria such as the supplier’s financial health, ethical compliance, environmental impact, and business continuity.
To build strong, long-term partnerships and ensure sustainable value creation, companies must conduct this process diligently.
The supplier evaluation process is typically carried out using specific metrics and scoring systems. These systems allow businesses to clearly identify which suppliers pose high risks, which need improvement, and which can be considered strategic partners. An effective evaluation process helps prevent supply chain disruptions, reduces costs, and increases customer satisfaction.
Why Is Supplier Evaluation Important?
Supply chain management directly affects a company’s competitiveness. A weak link in the chain can disrupt the entire system. Therefore, the supplier evaluation process is crucial for ensuring corporate sustainability.
Supplier performance impacts many areas, from product quality to delivery times, cost control, and customer satisfaction. Without regular and systematic evaluation, businesses may suffer both financial and reputational losses.
A robust supplier risk assessment enables early detection of potential crises and supports the development of preventive strategies.
What Methods Are Used to Evaluate Suppliers?
Supplier evaluation is a structured analytical process and can be applied using several different methods. The most commonly used techniques include:
1. Supplier Scorecards
Scorecards allow suppliers to be assessed using numerical data and various criteria such as cost, delivery, quality, customer service, and management. Each metric reflects how well a supplier meets your standards and expectations.
Every criterion is scored based on predefined weights, updated regularly, and used to track supplier performance over time.
2. On-Site Visits
Conducting on-site visits to supplier facilities provides valuable insights into their production processes, quality control systems, culture, operations, and occupational safety practices. It helps verify compliance with required standards firsthand.
3. Supplier Surveys
Supplier evaluation surveys provide companies with vital information for better supply chain management. These surveys cover topics such as operational capacity, quality standards, financial structure, certifications, costs, and risk management.
The data gathered helps objectively compare supplier performance and identify areas for improvement, offering real-time insights for supplier analysis.
4. SRM or Digital Evaluation Platforms
Digital supplier evaluation platforms consolidate supplier data into a centralized system and automatically score performance based on criteria such as quality, delivery time, and cost.
Known as SRM (Supplier Relationship Management) solutions, these platforms streamline the evaluation process, support data-driven decision-making, and reduce the risk of human error.
With advanced SRM tools like JetSRM, businesses can continuously monitor supplier performance, send alerts when necessary, and manage collaboration more transparently.
What Are Key Supplier Performance Indicators?
When evaluating suppliers, five key performance indicators (KPIs) should be considered:
Quality Indicators
These include product quality, process quality, and relevant certifications.
- Does the product meet technical specifications?
- Does the supplier hold industry-specific quality certifications?
- Are there standardized procedures for quality control?
Delivery Indicators
Timely delivery, flexibility in urgent situations, and lead times are crucial.
- Does the supplier deliver orders on time and without issues?
- What is the total lead time from order placement to delivery?
- Can the supplier respond to demand fluctuations or urgent orders?
Cost Indicators
This includes pricing and total cost of ownership.
- How do the supplier’s prices compare to market standards?
- Are any discounts or cost-saving opportunities offered?
Responsiveness Indicators
- Does the supplier respond promptly and thoroughly to inquiries?
- Is customer support helpful and involved?
- Can the supplier adapt quickly to changing needs?
Compliance Indicators
This covers legal compliance, contract terms, certifications, and alignment with national/international standards and regulations.
Communication, customer service, and agility are measured here.
These indicators help businesses control supplier-related risks and make more informed strategic decisions.
How Does the Supplier Evaluation Process Work in JetSRM?
Managing supplier relationships in a fragmented way is both inefficient and risky. JetSRM is an SRM solution developed to address the challenges businesses face.
It consolidates the entire supplier relationship lifecycle—from application to invoicing, quality and contract management, to performance evaluation—into a single end-to-end platform.
JetSRM’s supplier evaluation module enables real-time performance tracking, scoring, benchmarking, and historical data analysis. This not only saves time but also ensures more consistent and objective decision-making.
Unlike fixed evaluation templates, JetSRM allows companies to define custom, dynamic criteria based on their unique business needs. Users can configure performance metrics directly within the JetSRM portal and automate evaluation calculations accordingly.
For example, parameters such as a supplier’s responsiveness, delivery success rate, or frequency of system use can be dynamically analyzed based on data collected during daily operations.
To manage your supplier relationships more strategically and shape every step of the process based on data, now is the time to discover JetSRM.
Learn more about JetSRM or contact us to explore solutions tailored to your business needs.
