Supplier rating and relationship diagram template

supplier rating and relationship diagram template

For procurement less than this, use the Procurement plan lite template. Parts of the document contain suggested solutions (e.g. estimated whole-of-life costs, indicative timeline and evaluation criteria). . collaborative / tactical competitive relationship with the successful supplier]. .. Diagram: Risk analysis framework. 11, This is linked to the 'KPI Template' and should contain the same KPI's defined 13, The list of areas and KPIs in the 'Supplier Scorecard' tab of this tool can be . Continuous improvement and innovation adds value to the relationship and. Vendor rating is the result of a formal vendor evaluation system. concept in the United States and its focus on the critical role of the buyer-supplier relationship.

Selecting services and products from suppliers with excellent delivery ability can reduce or get rid of waste related with purchasing raw materials such as inventory, storage cost, and cost related with multiple times of material transferring.

Supplier need to make the delivery on-time based on company request. Supplier that perform excellent delivery ability can provide additional value to the company by reduce the risks of material running out, saving on unnecessary transportation costs, reduce the need to storage and cost inventory related cost.

The diagram above shows the application on Quality, Cost, and Delivery. Long-Term Relationship Some company will develop long term relationship with potential supplier. With this approach, both party need to share their mutual goals, establish metrics to guide the relationship and develop a series of ongoing discussion on how issues and conflicts can be resolved in a mutually beneficial manner over the times. These relationships may also involve joint cost-savings projects and new product-development efforts.

Financial Stability Financial status of the supplier should be carefully evaluated as its directly affects its ability to serve the customer. Analysis of Credit Reports plays an important roles in financial evaluation.

Vendor Rating - strategy, levels, system, type, company, hierarchy, system

Credit Report contain information about supplier financial status. Credit report contain information on the experience, management, and facilities of the potential supplier.

Total Quality Performance and Philosophy Supplier quality capabilities can be evaluated by using the supplier certification programs. By the use of the strategy above, company can reduce their supply base by only awarding to those suppliers who can become certified or awarding the supplier who become certified first. Those supplier with low abilities will not be able to become certifies, hence the supply base will be reduced. The certification criteria can be changed and updated as recertification is required.

The price and productivity hurdles can also be used in combination with certification. Construction organizations can add criteria to make it more difficult to be a preferred or strategic supplier. Certification programs are only as good as their design.

supplier rating and relationship diagram template

The characteristics that determine certification must be well thought out and realistic. When designing a certification program, careful attention should be paid to the selection of criteria. Good certification should include issues regarding equipment capability, quality assurance, financial health of the supplier, production scheduling methods, value analysis abilities, and cost-accounting methods.


Long-Term Relationship The exponential growth of internet use has made the dream of E-commerce be more realistic. The expanding market for E-commerce is too huge to ignore for all business. Rapid developments in the technology are improving and provided on-line services very quickly. E-commerce adoption has its organisational and business implications. The evaluation could be an ongoing process or it could occur within a predetermined time frame, such as quarterly.

Of course the rating must be conveyed to the participating vendor with some firms actually publishing overall vendor standings. If problems are exposed, the vendor should formally present an action plan designed to overcome any problems that may have surfaced. Many buying firms require the vendor to show continuing improvement in predetermined critical areas. Each area has a number of factors that some firms deem critical to successful vendor performance.

Pricing factors include the following: The prices paid should be comparable to those of vendors providing similar product and services. Quote requests should compare favorably to other vendors. Prices should be reasonably stable over time. There should be a low number of variances from purchase-order prices on invoiced received. Advance notice of price changes.

supplier rating and relationship diagram template

The vendor should provide adequate advance notice of price changes. The vendor should demonstrate respect for the customer firm's bottom line and show an understanding of its needs. Possible cost savings could be suggested. The vendor should also exhibit knowledge of the market and share this insight with the buying firm.

Are vendor invoices are accurate? The average length of time to receive credit memos should be reasonable. Estimates should not vary significantly from the final invoice.

  • 5 Key Criteria for Supplier Evaluation in the Construction Sector

Effective vendor bills are timely and easy to read and understand. Compliance with purchase order. The vendor should comply with terms and conditions as stated in the purchase order. Does the vendor show an understanding of the customer firm's expectations? The product or service must conform to the specifications identified in the request for proposal and purchase order.

5 easy steps to a supplier evaluation

Does the product perform as expected? Is the rate of product failure within reasonable limits? Is all repair and rework acceptable? Is the time until replacement is necessary reasonable? Is quality support available from the vendor? Immediate response to and resolution of the problem is desirable. The length and provisions of warranty protection offered should be reasonable. Are warranty problems resolved in a timely manner? Does the vendor offer products and services that are consistent with the industry state-of-the-art?

The vendor should consistently refresh product life by adding enhancements. It should also work with the buying firm in new product development. Delivery factors include the following: Does the vendor deliver products and services on time; is the actual receipt date on or close to the promised date?

Does the promised date correspond to the vendor's published lead times?

supplier rating and relationship diagram template

Also, are requests for information, proposals, and quotes swiftly answered? Does the vendor deliver the correct items or services in the contracted quantity? Is the average time for delivery comparable to that of other vendors for similar products and services? Packaging should be sturdy, suitable, properly marked, and undamaged. Pallets should be the proper size with no overhang. Does the vendor furnish proper documents packing slips, invoices, technical manual, etc.

Does the vendor demonstrate extra effort to meet requirements when an emergency delivery is requested?

supplier rating and relationship diagram template

Finally, these are service factors to consider: Good vendor representatives have sincere desire to serve. Vendor reps display courteous and professional approach, and handle complaints effectively. The vendor should also provide up-to-date catalogs, price information, and technical information. Does the vendor act as the buying firm's advocate within the supplying firm? Inside sales should display knowledge of buying firms needs. It should also be helpful with customer inquiries involving order confirmation, shipping schedules, shipping discrepancies, and invoice errors.

Manage Supplier Information (Chapter 2) R13 (update 18A)

Does the vendor provide technical support for maintenance, repair, and installation situations? Does it provide technical instructions, documentation, general information? Are support personnel courteous, professional, and knowledgeable? The vendor should provide training on the effective use of its products or services.

supplier rating and relationship diagram template

Does the vendor provide emergency support for repair or replacement of a failed product. The vendor should respond in a timely manner to resolve problems.

An excellent vendor provides follow-up on status of problem correction. A article in Supply Management notes that while pricing, quality, delivery, and service are suitable for supplies that are not essential to the continued success of the buying firm, a more comprehensive approach is needed for suppliers that are critical to the success of the firm's strategy or competitive advantage. For firms that fall into the latter category performance may need to be measured by the following 7 C's.