What is Supplier evaluation?

In business, supplier evaluation is a systematic assessment that corresponds to evaluation and aims to assess the performance of a service provider or supplier against predefined characteristics.

It mainly takes place in business-to-business and business-to-administration relationships of the supplier’s customer. Companies or public administrations evaluate their suppliers here.

With the supplier evaluation within the operational function of the procurement the supplier management and the supplier relationship management concern themselves. The supplier evaluation is intended to make the performance of suppliers transparent and comprehensible and serves as the basis for the supplier audit. The aim of the supplier evaluation is a targeted selection of suppliers. Because within just-in-time production, meeting the most precise delivery times is important, so delivery service and service levels are significant.

The goal of supplier evaluation is to pre-select suppliers so that it is not necessary to enter into negotiations with all suppliers in the subsequent award process. Furthermore, the focus is on enhancing supplier relationships in order to ultimately optimize the goods to be procured in terms of the individual characteristics to be defined specifically for the company. By combining the traits, a statement can be made about the overall performance of the supplier and the supplier can be classified in the same way. The classification is mostly done in the rough categories “preferred supplier”, “supplier to be developed” and “prohibited supplier” or according to ABC systematics. The individual characteristics vary in practice, as does the number of existing classes.