SUPPLIER EVALUATION AN ESSENTIAL TOOL

By Brian Ssenoga bssenoga@ug.nationmedia.com It is not common for small businesses to evaluate their suppliers citing challenges that come along with the practice but no matter the size of the business procurement experts have always recommended it for not only the smooth running of business but customer satisfaction as well. Claire Kawenja the manager Kushona designers advises that if one is to take part in a profitable business, be it selling products in an average wholesale shop or online, one must monitor both your suppliers and clients, as routine evaluation is a good option if you choose to start a business. “Most big suppliers typically are not looking to work with small sellers since they usually have a strong core customer base, negating the need to follow up on their product performance. Since these wholesale suppliers work with major consumers with a large amount of revenue, it is understandable that the supplier has no need to work on attracting customers, who are very much just small fish in a big container. They are more bent at selling and selling more not selling and checking on the product afterwards. It is better to carry out supplier evaluation especially when the product you are purchasing is just a raw material for the final product” adds Ms. Kawenja Supplier evaluation is a term used in business and refers to the process of assessing and approving potential suppliers by factual and measurable assessment. It can be done on the existing or new suppliers on the basis of their delivery, prices, production capacity, and quality of management, technical capabilities and service. The purpose of supplier evaluation is to ensure a selection of best suppliers available for use. Supplier evaluation is also a process applied to current suppliers in order to measure and monitor their performance for the purposes of reducing costs, mitigating risk and driving continuous improvement “Supplier evaluation is a continual process within purchasing departments and forms part of the pre-qualification step within the purchasing process although in many organizations and companies it may include the participation and input of other departments and stakeholders” says Kisambira Amraphel head sales and marketing at Fathil International Projects. He continues that an effective supplier evaluation process is always associated with other various benefits such as mitigation against poor supplier performance and performance failures. Supplier evaluation can also help customers and suppliers identify and remove hidden cost drivers in the supply chain. The process in a way motivates suppliers to improve their performance as some times the customer is required to visit the place where the supplier works from. The benefits characteristically include sourcing from suppliers that provide high standards of product and service levels whilst offering sufficient capacity and business stability. However the process always comes with a sizable number of challenges including making sure that evaluation of current suppliers goes beyond measurement to actual performance improvement by providing feedback to suppliers on their performance and working on continuous improvement opportunities. Some of the challenges associated with supplier evaluation may be eased by the use of appropriate tools. For simple projects a questionnaire can be used. But as evaluations become more intricate and frequent, data management and data integrity issues become significant. Thus, management commitment to and support of a supplier evaluation process is always essential.