How do you evaluate vendors fairly?
Give each vendor a score out of 100 every quarter. Let Purchase, Quality and Production each score the part they know best: delivery, price and service; inward quality and certificates; and usability on the floor. Add the scores, give a grade, and agree actions with the vendor.
Without a system, vendor opinion goes by memory and relationship. "He always delivers late" may be true, or it may be one bad month. "He is a good man" may hide a pattern of rejections.
A score replaces the opinion with facts that everyone can see.
Step 1: Rate each delivery
Every material receipt already creates a GRN. Use it. For each GRN, rate four things.
| Item | Example weight | What it shows |
|---|---|---|
| Quantity | 25% | Did the quantity match the order? |
| Delivery | 25% | Was it on time? |
| Quality | 30% | How much was accepted? |
| Service | 20% | Papers, response, replacements |
For delivery, agree a simple scale in advance, for example full marks if on time, slightly less for up to two days late, lower for a week, and lower again for two weeks. The weights and the scale here are examples. Each plant sets its own and writes them down.
These per-delivery scores are collected monthly into a scorecard. No extra work is needed, because the GRN already holds the dates and the quantities.
Step 2: Hold a quarterly evaluation
Once a quarter, the three departments sit for about 20 minutes per important vendor. Each scores their own area.
| Department | Example weight | Looks at |
|---|---|---|
| Purchase | 40 | Delivery, price and terms, documents, response |
| Quality | 40 | Inward acceptance, specification, test certificates, non-conformance reports and corrective actions |
| Production | 20 | Is the material usable, consistent, well packed? |
For each low score, write the reason. "Low" without a reason cannot be discussed with the vendor.
Step 3: Give a grade and an action
The total out of 100 becomes a grade.
| Score | Grade | Meaning |
|---|---|---|
| 90 to 100 | A+ | Preferred supplier |
| 75 to 89 | A | Approved |
| 60 to 74 | B | Conditional, with an improvement plan |
| Below 60 | C | Candidate to remove from the list |
These bands are examples. Use your own, but write them.
A supplier who is told only "you are not good" cannot improve. A supplier who is shown a score and a reason can.
Then agree an action with each vendor below A: what to improve, who owns it, and the date of the next review. Purchase informs the vendor, in writing and in a friendly manner. The aim is to build good suppliers, not to punish them.
Step 4: Use the result
- Give more business to A+ suppliers. They have earned it.
- Put B suppliers on a plan and review them next quarter.
- Do not give new orders for important items to C suppliers while a better source exists.
- Use the score when you compare quotations. Quality history on the sheet should come from the vendor's scorecard.
- For defects in bought material, Quality raises a non-conformance report and asks the vendor for its root cause and corrective action. Those reports feed the next quarter's score.
Be fair to both sides
Fair rating needs fair conditions.
- Judge delivery against the date you wrote on the PO, not an informal promise.
- If your own PO was late, or your drawing changed, note it. Do not mark down the vendor for your delay.
- Keep the same weights for all vendors of the same kind.
- Share the score with the vendor before it is used.
How to start in your plant
- List your active vendors and mark the 10 most important for material or outside processes.
- Write your four rating items, the weights and the delivery scale on one page.
- Start recording quality and delivery on each GRN.
- After one quarter, hold the first evaluation with Purchase, Quality and Production together.
- Share the grades with the vendors and agree one action each for the weakest three.
Key points
- Rate every delivery on quantity, delivery, quality and service, using the GRN.
- Hold a quarterly evaluation where Purchase, Quality and Production score their own parts.
- Convert the total into a grade and agree actions with the vendor.
- Be fair: judge against written dates and note your own delays.
- Use the grades when you choose suppliers and compare quotations.
