Effective Supplier Evaluations: Creating a Tool

Introduction

The main purpose of a supplier evaluation process is to find the inefficiencies and optimize these weak points. Production processes in various fields of economic activity acquire more complex forms, lose their integrity from the regional to the global level, are formed by new factors that have a significant impact on their development. Current market trends involve the production of goods or services with minimal resources for all enterprises involved in the supply chain. Evaluating supply chain performance is challenging, thus the communication process will be highly transparent, where the targeted suppliers will be informed in every stage of evaluation. An integrated system is being formed in which it is necessary to solve the problems of improving the planning and management of business processes. The process of evaluating the effectiveness of the supply chain is a characteristic of the degree of achievement of the final result, namely, the achievement of the corporate goal of the supply efficiency.

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Main body

In order for the company to adhere to ISO 9001, it must strictly follow seven quality standards. The template for evaluation will include these components shown in the table 1.

Table 1.

# ISO 9001 Quality Standards Evaluation Descriptions
1 Customer Focus Customers must be a centerpiece of the evaluative procedures
2 Leadership Correct leadership must be implemented
3 Engagement of people Individuals involved in the process must be fully engaged
4 Process approach The evaluation must consider the processes and their optimization
5 Improvement The management must always show quality standards improvements
6 Evidence-based decision making Problems must be solved or addressed by relying solely on the available evidence
7 Relationship management There must be a strong and professional relationship among involved parties

It is important to for the company to be prepared before the certification procedure. Thus, the main consideration should be focused on assessing costs of the registrar in regards the surveillance, registration, and recertification audits (“What are Quality Standards?”). The company should fully comprehend its current level of adherence to ISO 9001 standards. In addition, the company should allocate the required amount of resources to the given project, which include implementation and development procedures. There should be a consideration for costs that are related to consultations and support groups (“What are Quality Standards?”).

The company should also record evaluation data gained from supplier evaluations in order to analyze it and present to the interested parties. Therefore, the company must take a number of preliminary measures in order to ensure that ISO 9001 certification will be acquired. The implementation plan will allocate the key resources and data collection process to the evaluation teams, which will primarily focus on outlining the key supplies. The latter should be the most important and impactful suppliers, who supply the relevant items in a regular manner. The supplier communication plan will include the stages, such as introduction of the evaluation, the statement of reasons, and the potential benefit for the evaluated supplier. The data collected through the evaluation process will be used to improve supplier performance by outlining and specifying the points of inefficiencies.

Of the many indicators used in the practice of managing enterprises, as a system of indicators of the level of logistics services and supply chain assessment, criteria should be adopted that most objectively and fully reflect the effectiveness of supply chain management for the organization, ensure clarity and measurability, and which can be adjusted, if necessary, depending on specific conditions:

  1. the lead time;
  2. the proportion of orders that can be completed completely and immediately;
  3. readiness to fulfill the order;
  4. strict adherence to deadlines;
  5. the reliability of the execution of orders;
  6. flexibility in order fulfillment;
  7. reliability;
  8. the range of products;
  9. order fulfillment ratio;
  10. informational readiness.

The measurement system, which forms the basis for evaluating and analyzing business processes, must be defined and agreed upon before the project is implemented, as it is applicable at two stages – at the stage of analysis of the enterprise model and at the stage of evaluating the effectiveness of the entire enterprise. At the stage of model analysis, the effectiveness of business processes such as control parameters is evaluated. At the stage of evaluating the effectiveness of the reengineering project, the result of its implementation and how the control parameters have changed are evaluated. Evaluation of the economic efficiency of deliveries should be based on indicators of satisfaction with quality, cost and time, and the selection of priority processes for carrying out activities to optimize business processes in the links of the supply chain.

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The importance of the processes is determined by the management of the organization, taking into account their priority according to the expectations and requirements of consumers. Quality satisfaction indicators are calculated according to customer process estimates and the supplier sustainability (Bai et al. 7047). Evaluation of the time and cost of each process is based on a study of the resources consumed by the process and its execution time. The emphasis should be on calculating and analyzing the economic efficiency of the main deliveries and related business processes, the results of which are interested in external consumers, but on its basis the analysis of both auxiliary and servicing processes can be carried out on the basis of surveys of internal consumers.

It is necessary to adapt part of the classification and supplement it with a logistic component, which would take into account the specifics of material and associated flows in the supply chains, according to which deliveries must comply with standards. Thus, the material flow includes components related to the physical parameters of the order. Examples of failures associated with material flow include damage to packages, shortages or reassortment. The information flow includes document management and information flowing inside the supply assessment during its operation. Failures may be related to the execution or circulation of documents in deliveries, or during the exchange of information between participants in this process. The financial flow is characterized by cash costs for the organization of delivery of orders in the delivery procedures. These costs may appear in the process of recovery after failures, or as a result of failures. In all flows, various kinds of emergency situations can occur, which are expedient to distinguish into a separate category.

Conclusion

In conclusion, the integration of the given proposal will allow the company to create a tool with which it can identify the causes of discrepancies, and then develop corrective and preventive measures to further improve the activities of all processes taking place in the direct supply chain. The developed assessment and data collection of the effectiveness of deliveries is based on a criteria-based approach and an integrated assessment of the results. As a result of the analysis, factors that negatively affect the positive performance of the supply chain can be identified. The value of the integral coefficient will allow the manager to determine the level of supply performance and establish what measures are necessary to improve business processes in the direct supply chain. The measures taken to improve business processes will improve the generalized and positive effectiveness, and accordingly the effectiveness of the supply chain as a whole. As a result of measures aimed at improving the evaluation of processes, an increase in the effectiveness of the supply chain as a whole can be achieved.

Works Cited

Bai, Chunguang, et al. “Social Sustainable Supplier Evaluation and Selection: A Group Decision-Support Approach”. International Journal of Production Research, vol. 57, no. 22, 2019, pp. 7046-7067.

“What are Quality Standards?” ASQ, 2020, Web.

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StudyCorgi. (2021, August 20). Effective Supplier Evaluations: Creating a Tool. Retrieved from https://studycorgi.com/effective-supplier-evaluations-creating-a-tool/

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StudyCorgi. "Effective Supplier Evaluations: Creating a Tool." August 20, 2021. https://studycorgi.com/effective-supplier-evaluations-creating-a-tool/.

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StudyCorgi. 2021. "Effective Supplier Evaluations: Creating a Tool." August 20, 2021. https://studycorgi.com/effective-supplier-evaluations-creating-a-tool/.

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StudyCorgi. (2021) 'Effective Supplier Evaluations: Creating a Tool'. 20 August.

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