Vendor Evaluation: Process, Checklist, and Best Practices

How often do you evaluate your vendors? Are there any best practices that you follow and adhere to while evaluating the performance of your vendors? A robust supply chain is the backbone of a flourishing business. And hence, regardless of the industry you serve, your strong vendor relationships are a must.

Having strong vendors in your organization helps minimize operating costs and streamline production schedules without hampering the quality of your products. With a decent supplier evaluation process in place, you can significantly conquer your risks, improve visibility at every stage of operations, and create an outstanding value for your products and services.

A standardized set of vendor evaluation guidelines provides a specific frame of reference to assess a supplier’s abilities and compare them with competitors.

Criteria for evaluating vendors

While several factors affect vendor evaluation, there are several concerns that every company should address, regardless of the specific industry.

Depending on the context, a concrete vendor evaluation plan can help you in scenarios like:

• Intending to go for a repeat purchase
• Picking the best supplier among a pool of ‘genuine’ suppliers within a category
• Weeding out less qualified and poorly performing suppliers and substituting them with better ones
• Initiating a regular cost-benefit analysis practice

By conducting supplier evaluation regularly, your company can gain a more comprehensive insight into operations, lower risks, proactively recognize growth opportunities, streamline production timelines, discard unnecessary expenses, and sustain the performance of your vendors.

Checklist to be followed for vendor evaluation

Given below is a basic questionnaire that every organization should follow to evaluate their vendors. You can add more questions based on the nature of the business and requirements.

Best practices to be followed for preparing vendor evaluation questionnaires

When you design your vendor evaluation questionnaire, always keep the basic objective of analyzing the existing supplier base in your mind. Vendor evaluation should be carried out in terms of spend value and ratings.

Closing Thought

Although the vendor assessment process can be daunting as well as challenging, the perks include finding low-risk sources for high-quality goods and services, as well as the development of mutually beneficial, long-term business relationships.

Switch to an easier, faster way to evaluate your suppliers. Use data to choose the best-value vendors, with RFPflow.

Aavenir RFPflow offers a simplified RFX process management for procurement teams. RFPflow accelerates the RFx-to-award cycle time by creating easily accessible repeatable RFI/RFP/RFQ templates, bringing all stakeholders on a single platform, and standardizing the end-to-end sourcing processes.

Test drive the RFPflow product on ServiceNow instance to get immediate ROI with a negligible implementation timeline and deployment cost.