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What does supplier evaluation mean?

Supplier evaluation is a systematic assessment, comparable to a rating, which is intended to evaluate the performance of suppliers or service providers on the basis of previously defined characteristics. It is carried out primarily in the business-to-business and business-to-administration relationship by the supplier’s customer. Here, companies or public administrations assess their suppliers. In the business-to-consumer area, consumers assess service providers (for example, hotels), retailers, retailers or mail order companies as part of the online assessment. However, online rating is less objective and more prone to error than supplier ratings.

Supplier evaluation, which serves as the basis for the supplier audit, is intended to make performance transparent and traceable. In just-in-time production, compliance with precise delivery times is essential, so delivery service and service levels are important.

Supplier evaluation is carried out on the basis of certain evaluation criteria that are important for assessing the supplier. Evaluation criteria are statistical factors as well as changing factors. Statistical factors are delivery and payment terms, market share, market power, market behavior, pricing policy, bargaining power, product and service quality. Changing factors are customer demand, customer orientation, readiness to deliver, ability to deliver, delivery service, delivery time, delivery reliability or service level.