VENDOR AND SUPPLIER ASSESSMENT

CRITERIA CHECKLIST

COMPETENCY
X	CRITERIA	ACTION
Experience	Ask for a review and a brief history of the company’s years in business.
Customers	Request a list of key customers and contact information for endorsers.
Training and Development	Review the system the vendor has in place for staff training and development and any initiatives.
Key Personnel	Meet with the people who will be involved with your account.
Recruitment	Learn how people earn key positions and understand the hiring criteria.

CAPACITY
X	CRITERIA	ACTION
Current and Future Orders	Gather information to determine total capacity; determine if there is sufficient capacity to meet your current and future requirements.
Operational Statistics	Check statistics that provide evidence concerning quality problems or service levels. This type of data is easy to acquire when the vendor or supplier has ISO accreditation.
Resources	Ensure that the necessary systems and procedures are in place to support good quality and high levels of service.

CONSISTENCY OF PERFORMANCE
X	CRITERIA	ACTION
Consistent Quality and Service Levels	Determine if the supplier will be able to deliver high levels of quality and service throughout the life of the contract. One indicator of customer focus is whether or not the supplier has a dedicated account manager or team of experts who can answer questions or service needs.
Statistical Process Control (SPC)	SPC measures the quality of the product, identifies trends to slip outside tolerance limits, and takes corrective action before a problem occurs in order to enhance quality and contain costs.

COMMITMENT TO QUALITY
X	CRITERIA	ACTION
Item or Service	Ask for reviews and endorsements from customers or independent sources regarding the quality of the item or service.
Quality Management	Look into quality processes that the vendor employs, such as total quality management (TQM) or quality control measures that quantify the standard of output.
Standards Compliance	When it is essential to your business, verify that potential partners adhere to standards relevant to their business (and yours). Standards may be related to product quality, such as international production ISO standards or the QS 9000 for American car manufacturers. Compliance with regulations like the Payment Card Industry Data Security Standard (PCI DSS), the HIPAA standards for healthcare information, and the California Electronic Communications Privacy Act (Cal ECPA) may also be relevant to your business.
Non-Destructive Testing (NDT)	NDT analysis is used in the technology and science industries to evaluate products or processes without causing damage, harm, hazards, or financial loss.
Continuous Improvement	Check for organizational culture and corporate value that focus on continuously achieving and improving quality.

COST
X	CRITERIA	ACTION
Price	Price quotes should reflect quality, service, and industry competition.
Full Cost Analysis	Ensure that your vendor or partner has a well-run business based on variable costs, fixed costs or overhead, profit margins, and the break-even point.

CASH AND FINANCE
X	CRITERIA	ACTION
Balance Sheet	Check the official record of fixed and current assets and how they are financed.
Profit and Loss	A P&L sheet shows you whether the supplier is making a profit; the sheet is also an indicator of company stability.
Credit Rating	The financial institution credit rating should be high — a poor rating is an indicator of mismanagement.
Financial Reputation	Ask customers, analysts, and colleagues about a prospective partner’s financial suitability.

COMMUNICATION
X	CRITERIA	ACTION
Appropriate Channels of Communication	Ensure that the vendor can attend regular meetings, Skype events, or teleconferences.

CONTROL OF INTERNAL PROCESSES
X	CRITERIA	ACTION
Inventory	When a vendor or supplier carries sufficient inventory, it should be able to supply the right quantity at the right time.
Quality	Quality controls are essential to a successful contract.
Operations	Disciplined operations enable on-time deliverables that meet specifications in the correct quantity.
Procurement	Efficient procurement processes are essential when your vendor uses its key suppliers to keep costs in line.
Health and Safety and Environment (HSE)	Check for sound systems and procedures, as well as an excellent safety record, which demonstrates social responsibility and a workplace that motivates staff and builds morale.

CLEAR (Corporate Social Responsibility)
X	CRITERIA	ACTION
Follows Ethical and Legal Standards	Products and services should satisfy legislative requirements. Evidence of conformity might include policy and processes aimed at delivering ethical best practices, positive media or feedback, or good ratings from industry agencies.

CULTURE
X	CRITERIA	ACTION
Values	A healthy relationship can foster a long-term and sustainable partnership that adds value to both parties.
Understanding Business Drivers	A partner should understand what impacts your business, from the competitive environment to the latest innovations.

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