Supplier assessment, also known as supplier evaluation, is the process of assessing potential and existing suppliers. In the construction industry, ‘supplier’ is a very general term which refers to organisations contracted as part of the delivery of a built asset.
The aim of supplier assessment is to ensure that the needs of the client organisation are met and, in the case of current suppliers, to examine and measure performance in terms of whether improvements or efficiencies can be made. It forms an essential part of strategic sourcing of suppliers and supplier management, as well as helping to maintain competitiveness.
A model known as the ‘Carter 10Cs model’ is a widely-recognised method of assessing suppliers. The ‘Cs’, which are examined in terms of whether the supplier is sufficiently able to provide them, are as follows:
- Control of process.
- Commitment to quality.
- Competitive cost.
- Communication efficiency.
Supplier assessment may be carried out using a supplier assessment form which is a questionnaire filled in by suppliers.
The typical categories that may appear on a supplier assessment form include:
- Supplier information: Names, addresses, etc.
- Contracts management system: Projected turnover, issued share capital, combined value of orders, etc.
- Quality management system: Training programmes, inspections process, product handling, etc.
- Standards/certifications: Current approvals and so on.
- Health and safety: Accredited programmes, policies and procedures, etc.
- Security: Procedures and processes, etc.
The advantages of using a supplier assessment process are that it can help mitigate against poor performance or failures on the part of suppliers; ensure high standards of product and service; and can serve as a form of motivation for suppliers to improve.
Some of the challenges for the client include allocating adequate time and other resources to effectively establish and maintain an assessment system. In addition, there is the challenge of providing suppliers with performance feedback so that continuous improvement can be achieved.
Other forms of supplier assessment include:
- Selection criteria, against which prospective suppliers can be assessed.
- Pre-qualification questionnaires - used during procurement processes to enable the client to produce a short list of suppliers that are likely to be most appropriate for their particular project.
- Tender evaluations - a process of assessment undertaken during procurement processes to identify a preferred tenderer.
- Due diligence - assessment of the capability and financial status of a prospective supplier before appointing them.
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