What is a scale supplier evaluation?

Scale supplier evaluation refers to using the index evaluation system to evaluate the scale supplier’s supply quality service level, rental price, punctuality, credit, etc., to lay the foundation for the selection of scale suppliers.

Scale supplier evaluation content

The basis of evaluating scale suppliers is to determine the evaluation’s content, method, status, and role. Based on the status and role of scale suppliers in the enterprise supply chain, this issue can be considered from the following aspects.

1. Does the scale supplier comply with the scale supplier code of conduct established by the company?

Scale supplier code of conduct is the most basic behavioral restraint for the scale supplier. It is also the basic guarantee for the two parties to maintain a cooperative relationship. This is the primary content of the scale supplier evaluation.

2. Whether the scale supplier has basic professional ethics

This is mainly manifested in the following aspects:

1. Whether to comply with the non-disclosure agreement specified by the company.
2. Whether the trust of the purchasing personnel has been obtained through improper means.
3. Whether the purchasers are invited for entertainment through improper means.
4. To drive up material prices in series with other related companies.
5. Whether the provided materials are shoddy and whether they can reach the quality agreed in the contract.
6. Whether to allow purchasing personnel to hold the shares of the supply company to bribe them.

3. Whether the scale supplier has a good sense of after-sales service

Purchased materials may be damaged due to quality problems or improper use during assembly, use, and transportation. When this happens, the scale supplier should repair it promptly and provide relevant after-sales service support instead of delaying or causing the purchasing company to suffer losses.

4. Whether the scale supplier has a good sense of quality improvement and innovation

With the intensification of market competition, technological innovation and product innovation of enterprises emerge in an endless stream. Especially in high-tech enterprises, the speed of product replacement has been measured daily. The innovation awareness of enterprises is inseparable from the support of scale suppliers and the progress of raw material quality and technology. Sometimes the innovation of scale suppliers is even one of the driving forces for enterprise innovation, which provides enterprises with greater profit margins.

5. Whether the scale supplier has a good operation process, standardized enterprise code of conduct, and modern enterprise management system

scale suppliers with chaotic management and unsound behavior rule to survive and develop in the fierce competition because these problems are not conducive to establishing long-term and stable cooperative relations with buyers.

6. Whether the scale supplier has good communication and coordination skills

Cooperation between enterprises should be based on good communication and coordination between the two parties. In production and management, enterprises may need the cooperation and help of scale suppliers for various reasons, such as computer and automobile manufacturing enterprises. Because the technology is specialized, it needs to be assembled and produced under the operation guidance of professionals.

7. Whether the scale supplier has good enterprise risk awareness and risk management capabilities

The future market demand for some materials is difficult to determine, there may be a great demand, or there may only be a supply in the research and development stage. Scalesuppliers with good risk management capabilities can provide the materials and products required by the enterprise at a reasonable price in an uncertain market environment to ensure normal production activities of the enterprise.

8. Whether the scale supplier can provide materials that meet the requirements of the purchasing enterprise within the specified delivery period

is the minimum standard for companies to evaluate scale suppliers. Whether it is a scale supplier with a long-term relationship or a short-term supply contract is crucial.

Of-scale suppliers involve many aspects, and different companies have specific requirements and expectations. For large enterprises, especially multinational groups, the success of scale supplier selection is related to the normal operation of the entire enterprise system, so they have more, stricter standards and broader content when evaluating scale suppliers. Small and medium-sized enterprises have relatively loose requirements for scale suppliers. In addition, in terms of evaluation content, some aspects are of the operation of the enterprise. According to their scale and operation, many enterprises have formed an index system for evaluating scale suppliers according to the actual situation.

Scale Supplier Evaluation

1. Analyze the market competition environment

The market competition environment must be analyzed first to establish a long-term cooperative relationship in the supply chain based on trust, cooperation, and open communication. The purpose is to determine effective product markets to develop a supply chain partnership. Enterprises must know the current product demand, product type, and characteristics to confirm the customer‘s needs and whether it is necessary to establish a supply chain partnership.

2. Create selected goals

Businesses must determine how the scale supplier evaluation process will be implemented and establish concrete, realistic goals. The evaluation and selection of scale suppliers is not a simple process; it is also a business process refactoring process of the enterprise itself.

3. Establish scale supplier evaluation criteria

scale supplier evaluation index system is the basis and standard for the enterprise to evaluate the scale supplier comprehensively. It is an index reflecting the different attributes of the complex system formed by the enterprise and the environment. The following aspects may affect supply chain partnerships:

1. Performance of scale suppliers.
2. Device management.
3. Human resource development.
4. Quality control.
5. Cost control.
6. Technology development.
7. Customer satisfaction.
8. DeliveryAgreement.

4. Establish an evaluation team

Enterprises must establish a special group to control and implement scale supplier evaluation. The members of this group are mainly from departments closely related to supply chain cooperation, such as procurement, quality, production, engineering, etc.

5. Scale Supplier Participation

When a company decides to carry out a scale supplier evaluation, the evaluation team must get in touch with the initially selected scale suppliers to confirm whether they are willing to establish a supply chain partnership with the company and whether they desire to achieve a higher level of performance. Therefore, enterprises should involve scale suppliers in the evaluation design process as early as possible.

6. Evaluation Scale Supplier

evaluating a scale supplier is to investigate and collect comprehensive information about the scale supplier’s production operations. Based on collecting scale supplier information, certain tools and technical methods can be used to evaluate scale suppliers.

7. Implementing Supply ChainPartnerships During the process of implementing supply chain partnerships, market demands will continue to change. Enterprises can modify the scale supplier evaluation criteria in time according to the needs of the actual situation or restart the scale supplier evaluation selection. When re-selecting scale suppliers, the original scale supplier should be given enough time to adapt to the changes.

Scale supplier evaluation indicators

scale supplier evaluation is mainly assessed through the following indicators.

1. product quality

Product quality is the most important factor. During the operation, the inspection of product quality is mainly strengthened. There are two types of inspections: one is full inspection, and the other is spot inspection. The workload of the full inspection is too large, and the method of random inspection is generally used. The quality pass rate can describe the quality of quality. If a total of N pieces are sampled in one delivery, and pieces are qualified, the quality pass rate is P. Its formula is

Obviously, the higher the quality pass rate, the better. In some cases, companies take measures to return substandard products, and the return rate can also describe the quality pass rate. The so-called return rate refers to the ratio of the return volume to the purchase volume. If you purchase n times (or pieces, pieces) and return r times (or pieces, pieces), the return rate can be expressed by the following formula,

2. delivery date

Delivery time is also a very important assessment indicator. The main purpose of checking the delivery date is to check the on-time delivery rate of the scale supplier. The on-time delivery rate can be measured by the ratio of the number of on-time deliveries to the total number of deliveries. Its formula is

3. delivery

The inspection of delivery is mainly to evaluate the on-time delivery. On-time delivery can be evaluated by the on-time delivery rate, which refers to the ratio of the actual delivery within a given delivery period to the delivered delivery within the period. Its formula is

4. work quality

The quality of the assessment work can be described by the delivery error rate and the delivery breakage rate, respectively

5. price

Price refers to the price level of the supply. To assess the price level of scale suppliers, it can be compared with the average price and the lowest price of products of the same grade in the market. They are represented by the market average price ratio and the market minimum price ratio, respectively. We set m= the Supplier supply price, n= Average market price =n, and z= Lowest price in the market. Its formula is

6. Purchase cost level

the purchase cost-saving rate can assess the scale supplier. We set m= Current purchase costs, n= Priorperiod purchase costs=n. Its formula is

7. credit

credit rating mainly assesses the extent to which scale suppliers fulfill their commitments, treat people honestly, and do not intentionally delay or owe their accounts. We set m= the Number of defaults during the period and n=the Total number of transactions during the period. The credit formula is

8. degree of cooperation

degree of cooperation mainly evaluates the coordination spirit of scale suppliers. In getting along with scale suppliers, it is often necessary to adjust and change work tasks due to changes in the environment or specific circumstances. Such changes may lead to changes in the scale suppliers’ work or even cause the scale supplier to make a little sacrifice. This can examine the extent to which scale suppliers cooperate with these parties. In addition, if work is difficult or a problem occurs, it may sometimes need to be solved. At this time, the cooperation degree of the scale supplier can be seen. Assessing the cooperation of scale suppliers mainly depends on people’s subjective scores. Mainly good staff who get along with scale suppliers and ask them to rate scale suppliers based on their experience in this area. Particularly typical, there may be cases of reporting. At this time, the situation of reporting or complaint can also be used as one of the scoring basis.

Scale Supplier Evaluation Criteria and Weights

While organizations use different criteria and assign different weights to selection criteria, it is equally important for any organization to be as objective as possible within a given organization. Some scale supplier evaluation criteria are listed in the chart, categorized according to four weighted categories: Competitive Demonstration, Qualification Capability, Solution Suitability and Competitiveness, and Relationship Suitability and Dynamics.