Companies are increasingly concerned about providing customers with lower-cost products and faster service than their competitors.
To achieve this, it is necessary to have an agile supply network, and managers soon realized the importance of having a good relationship with logistics partners.
As this relationship progressed, another factor that became apparent was the need to evaluate suppliers to ensure that the companies contracted were, in fact, efficient. It's easy to understand where this concern came from: there are several criteria when choosing a strategic partner—cost, quality, supply capacity, and delivery performance being the main ones.
With all this information, having a supplier evaluation spreadsheet helps companies understand which partners truly contribute to their goals and which need to be replaced.
If you don't know how to evaluate suppliers or what the main supplier evaluation criteria are, continue reading and discover how to set up and analyze metrics to assess whether the contracted company is being efficient.
Evaluation criteria
Have you ever heard of the acronym KPI? It stands for Key Performance Indicator and refers to performance metrics or indexes. This type of monitoring emerged in the 1990s to measure the performance of various areas of an organization.
Gradually, their role has expanded, and today we can use KPIs as a basis for various metrics, including supplier evaluation. The first step is to identify the key deliverables your strategic partners must deliver.
Generally, the main criteria for evaluating suppliers are:
Delivery time
Without a doubt, this is one of the most important metrics when considering strategic partners. Imagine what would happen to your company if delivery times increased too much? Your customers would be extremely dissatisfied and, in the worst case scenario, could cancel their contract with you.
Therefore, when evaluating suppliers, review their order history and verify whether deliveries were made on time and with quality. If the answer is no, it's time to talk to the partner and, if the situation persists, switch suppliers.
Price
There's no way to ignore the importance of price when choosing a strategic partner. Of course, it can't be the only factor influencing the decision, but it does play a significant role. Therefore, get quotes from other companies and compare the cost-benefit ratio.
Remember: your company's financial health is directly linked to this metric. Research carefully and, if possible, talk to other customers of the supplier to see if the price they charge is truly worth it for the service.
Ability to adapt
All companies, regardless of their industry, need to plan to ensure their deliveries are met and their customers are satisfied. However, unexpected events do happen—and it's in these situations that you can assess your suppliers' adaptability.
How do they react to requests that weren't originally agreed upon? Are they able to streamline the process and meet demands frequently, or do they end up hindering more than helping? Of course, because these are unforeseen situations, they won't always be able to meet demands. However, the supplier evaluation questionnaire must list the partners' ability to adapt.
Customer service
Many overlook this metric, but it's extremely important: customer service. Think about the times you've had to contact your supplier, whether to place an order or ask a question. Were your points of contact efficient and helpful? Did they exceed expectations or fall short?
When evaluating a supplier, it's crucial to consider customer service, as this is the most important aspect of your relationship with the company. If partners aren't careful when dealing with companies, this can lead to internal communication issues, which can impact delivery quality and timing.
After-sales
This topic is all about customer service, but its unique characteristics make it necessary to better explain how after-sales service is a crucial metric for assessing the efficiency of the contracted company.
Unfortunately, many projects are excellent from the quote to delivery—and then disappear. If you need spare parts or to expand your storage area, for example, you have no one to turn to. This leaves a terrible impression on the client, who, until then, could have been your promoter.
Therefore, we understand that after-sales service is a key factor in improving the public's perception of the brand, demonstrating that the company is willing to help and solve consumer problems. Therefore, we recommend that you reflect on your current strategic partners: are they always helpful, or do they simply disappear after the purchase is made? The answer to this question helps you determine whether the supplier is truly reliable and committed to your results.
With this information, you can now create your own supplier evaluation checklist and assess whether the companies you hire are helping your business. It may seem like a lot of work, but believe me: this assessment is essential to maintaining your business's financial health and ensuring your customers remain satisfied.
