What To Look For When Selecting and Evaluating Your Supplier

Evaluating suppliers play a critical role in maintaining customer loyalty, as well as building and reinforcing relationships. Assessing your existing suppliers allows businesses to remove excess waste and increase efficiency. In contrast, those using evaluations for new suppliers provide a starting point towards establishing high-quality results and setting an expectation.

Understanding what you’re evaluating is essential, whether it’s an existing supplier or adding a new supplier. While we know it’s necessary to conduct these supplier evaluations initially and regularly, you must consider the specific factors and key areas your quality team should evaluate. Assessing your suppliers establishes value for your customers and aids in reducing possible risks, as well as ensuring you continue to provide your customers with the best products and services.

hbi_supplierevaluation

September 13, 2022

“When I locate and evaluate new suppliers, I focus on their response time, price, research & development, capability, certifications, and GMP.”

So how does a business determine the most critical components of a supplier evaluation? Initially, establishing and communicating these goals with your supplier enables healthy communication and clear expectations upfront. If you’re working with an international supplier, are you conducting an in-person evaluation or a virtual evaluation? Do you have a quality team conducting the assessment, or are you hiring a third party? Once you know how the evaluation will be conducted, determine the most critical factors of the evaluation, such as quality, potential risks, production capacity, performance, cost, experience, etc. As you solidify the key components of your supplier evaluation, understand that these are fluid and forever evolving. As you build a relationship with your supplier, your evaluation may continue to evolve.

We asked HB’s team what they look for when evaluating our suppliers, and here are the responses that we received:

hbi_supplierevaluation_qualityQUALITY

  • Is the supplier properly following quality control procedures?
  • Does the supplier meet customer expectations?
  • Does the supplier obtain certifications?
    • What types of certifications does the supplier currently have?
    • Are they willing to get certified in other areas, if necessary, for your product(s)?
    • Is the supplier willing to maintain these certifications or recertify, if necessary?
  • Does the supplier comply with specific industry standards / best practices and regulations depending on the product and country?
  • Who conducts quality checks?
    • Does the supplier have a partnership with a third party?
    • Does the supplier allow businesses to use their quality team?
  • Does the supplier allow quality teams to conduct in-person product inspections and audits?
  • Is the supplier willing to adjust their quality control procedures to meet the needs of your business and customer?
  • Does the supplier allow quality teams to take pictures of the product, production, factory layout, and machinery/production videos?
  • Is the product quality deteriorating over time, or are they consistently producing high-quality products?

hbi_supplierevaluation_riskmanagementRISKS

  • How does the supplier handle risks?
  • Is the supplier willing to adjust the product’s specifications to meet the new requirements if a product is faulty?
  • Does the supplier have a quality source for raw materials?
    • What happens if there is a shortage of raw materials?
    • Does the supplier have a second source or backup plan?
  • If there is an interruption to production, does the supplier have a plan to resolve or respond to the following risks:
    • IT failure
    • Electrical or energy failure/shortage
    • Labor strikes/shortage of employees
    • Weather
    • Poor ethical practices

hbi_supplierevaluation_productcapacityPRODUCTION CAPACITY

  • Is the supplier’s lead time acceptable?
  • Are they able to meet the demands of production?
  • Does the supplier continue to have capacity? Or do they struggle to fulfill orders?
  • Does the supplier continue to reach their maximum capacity limit or monitor and manage their capacity so that they can adjust and increase when necessary?
  • Do their raw materials and resources meet your expectations?
  • Does your supplier assist in optimizing production?

hbi_supplierevaluation_productperformance

PRODUCTION PERFORMANCE

  • Is the supplier consistently producing a high-quality product?
    • Is the supplier using the correct raw materials for production?
  • Is the supplier meeting packaging expectations for you and the customer?
    • Is it packaging according to the customer’s request?
    • Is the labeling correct, according to the customer’s request?
    • Is the correct quantity boxed/bagged for shipping?
  • Are products being produced and shipped on time?
    • Is the customer receiving their products by the anticipated delivery date?
    • If not, is the supplier communicating these delays to you? The customer?
    • Is the customer receiving the correct quantity of product?
  • Is the supplier reliable?

hbi_supplierevaluation_costCOST

  • Is the supplier capable of providing a competitive cost for the product requested?
  • Does the supplier offer price breaks?
  • Does the supplier offer unnecessary fees? Can these fees be eliminated?
  • Are there customer discounts for a particular number of purchase orders?

hbi_supplierevaluation_customerservice CUSTOMER SERVICE

  • Does the supplier communicate effectively?
  • Is the supplier prompt in their responses?
  • Does the supplier respond promptly to phone calls, emails, messages, etc.?
  • Is the supplier friendly and capable of working well with others?
  • If a customer is unhappy with their product, is the supplier willing to suggest and provide improvements to fulfill the customer’s expectations best?
  • How quickly does the supplier respond to messages? Is this timeframe appropriate and consistent?

Of course, businesses may use many other factors to evaluate their suppliers, which can be inserted depending on your needs and customer expectations. All supplier relationships are different. It’s contingent on your business on how you differentiate these factors for your supplier evaluation that will best suit the needs of your customer and your business.

How Can HB International’s Quality Team Assist Your Next Supplier Evaluation?

Our in-house Quality Assurance team and Project Managers hold high expectations for our international suppliers. Our quality team and project managers ensure that suppliers are reliable, communicative, respectful, and competitive. Depending on your product and the nature of your business, HBI’s team is equipped to assist in supplier selection, evaluations, product inspections, and supplier audits to assist you and your customers.

Are you interested in learning more? Let us know how we can help you. Complete the form below, and a member of our team will be in touch:

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