How do you evaluate the performance of your contract suppliers?

This is the first step in supplier evaluation. The criteria should be aligned with your organization’s strategic goals and objectives. For instance, if your organization prioritizes sustainability, then one criterion could be the supplier’s commitment to environmentally friendly practices. The criteria should be SMART and shared with the suppliers.

One perspective that could be considered in "Set clear and measurable criteria" is the perspective of the end-users or customers. While the article mentions criteria such as quality, cost, delivery, service, compliance, and innovation, it may be beneficial to include specific criteria related to customer satisfaction or user experience. This could involve collecting feedback from customers or end-users and incorporating their perspectives into the evaluation process. By including customer satisfaction as a criterion, organizations can ensure that the suppliers are not only meeting contractual obligations but also delivering a satisfactory experience to the ultimate beneficiaries of the goods or services provided.

The supplier performance evaluation score sheet is an easy but could be subjective way to evaluate your suppliers. The Weighted point method is more complicated and scientific tool to evaluate, as well, suppliers.

This could be done through various methods such as spend maps, surveys, inspections, or reviewing delivery records. Once the data is collected, it should be analyzed to identify trends and areas of concern. For instance, if you notice that a supplier’s delivery times are consistently longer than agreed upon, this is an area that needs attention.

External benchmarks: In addition to comparing the supplier's performance internally or against other suppliers, it can be valuable to benchmark their performance against industry standards or best practices. This allows you to gain a broader perspective on their performance and identify areas where improvements can be made. Customer satisfaction: While the article mentions soliciting feedback from the supplier's customers, it is important to emphasize the significance of customer satisfaction as a key metric for evaluating supplier performance. Customer feedback, surveys, and reviews can provide insights into the supplier's ability to meet customer expectations, responsiveness to issues, and overall customer experience.

It is probably a good idea to includes service level agreement (SLA) so that it will minimize the risks and encourage the supplier to performs and meet your expectations, as customer.

Performance evaluation of contract suppliers involves KPI tracking, regular audits, and feedback mechanisms. In renewable energy projects like offshore wind, metrics include on-time delivery and component quality. Grid code compliance studies assess adherence to technical specifications and regulatory requirements. Manufacturing evaluations focus on defect rates and production efficiency. Battery storage projects monitor technology reliability and maintenance responsiveness. Continuous assessment ensures supplier accountability and project success.

Our world is changing. Our priorities too. Apart from the standard criteria, there might be other factors that are unique to your organization or industry. For example, a company that values sustainability might also evaluate suppliers on their environmental impact. This could involve looking at the supplier’s waste management practices, energy use, or carbon footprint.