For various aspects of business operation, many businesses depend heavily on the performance of their suppliers. If your suppliers provide materials, labor, tools, or services, they probably play a key role in the overall performance of your company. If you have a supplier whether it is concrete supplies or cement supplies involved in the day-to-day activities, the best guy for the job must be chosen initially, and their performance should be constantly reviewed during the partnership. Here are a few steps to review their performance:
- Make the Criteria for Evaluation
To continue business with your supplier, it is necessary to recognize the characteristics that your suppliers should have to demonstrate and retain. They must be thoroughly conscious of these traits from the outset of the partnership and be mindful that they will be assessed frequently (monthly, quarterly, and annually). The metrics used to measure your providers’ output would be decided by your company market, procedures, and unique requirements. The criteria may include Accuracy, Timeliness, Responsiveness, Quality Control, Capability, and Flexibility.
- Categorize Suppliers for Evaluation
It makes no sense to judge them all in the same manner if the supply chain consists of several suppliers, where each has a different feature that impacts your business differently. Decide how your vendors should be categorized and then analyzed based on their impact on your business operation. Spend more time in evaluating the output of your critical suppliers by separating suppliers into two groups, including critical and non-critical suppliers or main and secondary suppliers.
- Establish Roles in the Evaluation Process
There is actually not a single employee of the company who gets an overview of the performance of each provider. The assessment should be performed by people who work nearest to the supplier. Just decide who will be accountable from there for the assessment analysis and decision-making.
- Enact a Method for Evaluation
There are several methods that organizations can use to determine the performance of a supplier. Techniques include surveys, evaluation forms, system metrics, and software applications.
- Know When to Say Goodbye
You have to know when to commend a supplier and whether to raise a red flag to their results. Make sure that you enjoy a decent job. Continue to deal with suppliers like Bernardi Building Supply that are reliably doing well.
If you have a provider whom you find is not doing what you have planned, lift a red flag and give a warning – whatever you think you need. You should give the provider a chance to fix the issue by sending a warning. It is not about examining the efficiency of your provider as much as it is about strengthening your relationship.