2.1Supplier selection and evaluation
The essentials in 30 seconds
- Scoring = rate each supplier on weighted criteria set before judging (CQT + finance + capacity + CSR).
- Targeted audit: visit the site only for high stakes — the dossier claims, the visit proves.
- Continuous evaluation: measure facts (OTIF, disputes) and decide: retain, improve or exit.
Running mini-case — Nadia switches to scoring
Nadia, buyer at an agri-food SME in Algiers importing packaging and raw materials, used to choose suppliers by feel and price. After two stockouts from delays and one quality dispute, she decides to rate her five key suppliers on facts: quality, lead times, price, responsiveness. This thread follows her switch to rigorous selection, with scoring, targeted audit and six-monthly review, to secure supply without raising costs.
This same case runs through the course, the diagram, the script and the 48h challenge — and continues in 2.2, 2.3, 2.4 and 2.5.
1. Selection criteria and scoring
Selection is never improvised: you set explicit, weighted criteria before scoring, tailored to the purchasing family. The core remains CQD — price competitiveness, quality consistency, delivery compliance — completed by financial health (a fragile supplier is a stockout waiting to happen), capacity (can it absorb your volumes and their growth?), certifications and compliance, location and its logistics implications, and increasingly contractual CSR criteria.
The summary tool is scoring: each criterion gets a weight (e.g. quality 30, lead times 30, price 25, responsiveness 15) and a fact-based score. The weighted score ranks candidates and makes the decision explainable — the same logic as the tender grid (1.4), this time applied to the supplier rather than the bid.
Weighting means trading off: on a critical purchase reliability weighs more than price; on a leverage purchase price dominates. Without explicit weighting, momentary impressions and sympathy take over and the choice becomes indefensible.
2. The supplier audit: when and how
For high-stake purchases, the audit completes the file: visit the site, see the facilities, understand the quality organisation. What a sales file declares and what a visit reveals are sometimes two different realities: housekeeping, traceability, handling of non-conformities and subcontractors are judged on site.
Audits are costly: they are reserved for high risks — before listing a critical supplier, after an unexplained deterioration, or periodically for strategic partners. For the mass of routine suppliers, documentary evaluation and goods-in checks are enough.
For a small business, a light half-day audit with a simple checklist (premises consistent with statements? quality checks recorded? non-conformities managed? subcontractors identified?) already delivers the essentials. Simply having visited changes the relationship and the vigilance.
3. Continuous evaluation and decisions
Once listed (approved onto the panel), evaluation becomes continuous: OTIF, non-conformity rate, responsiveness on disputes and price evolution, measured each half-year and discussed with the supplier. Without measurement, you judge on recent impressions; with measurements, you talk facts: “your OTIF dropped from 96% to 82%”.
This measurement feeds three decisions: retention (and entrusted volume — the best deserve more), improvement plan (an average strategic supplier you help with dated objectives), and exit (a chronic underperformer replaced — all the easier when the panel maintains a qualified alternative).
Proportionality rule: this full system covers your important suppliers; for trivial occasional ones, exception tracking (no reported problem = no issue) is enough. Evaluation energy goes where the stakes are.
🔎 Concrete example — The scoring that lets facts speak
Five suppliers scored on quality (30), lead times (30), price (25) and responsiveness (15) from the last six months of real data.
Fact: the cheapest supplier scores 14/25 on lead times (68% OTIF) and drops to 4th place on the weighted total.
Decision: more volume to No. 1 (97% OTIF, 2 disputes settled within 48h), a 90-day improvement plan for No. 3, scheduled exit of the last one.
Section vocabulary
- Selection criteria
- Explicit grid for appraising a supplier: price, quality, lead times, financial health, capacity, certifications, location, CSR — weighted by purchase family.
Simple example: Nadia keeps 4 criteria for her packaging: quality 30, lead times 30, price 25, responsiveness 15.
What it is not: choosing by feel because the salesperson “seems serious”.
Reflex: weights set in writing before any score, never after.
- Supplier scoring
- Weighted score summarising criterion-by-criterion evaluation; makes selection and tracking objective and comparable.
Simple example: Nadia ranks her 5 suppliers on the last 6 months of real deliveries.
What it is not: an average of impressions with no dated facts.
Reflex: each score backed by a measured fact (OTIF, quantified delay).
- Supplier audit
- Structured site visit (facilities, organisation, quality) to check reality behind the commercial dossier; reserved for high stakes.
Simple example: Nadia spends half a day visiting her critical packaging supplier with a simple checklist.
What it is not: auditing every small occasional supplier.
Reflex: one targeted visit beats ten re-read dossiers.
- Listing
- Decision to approve a supplier onto the panel after qualification; opens the right to place orders with them.
Simple example: Nadia only orders volumes from suppliers listed after scoring.
What it is not: ordering big from an unqualified newcomer “to test”.
Reflex: no repeat orders without listing.
- Continuous evaluation
- Regular measurement of real performance (OTIF, non-conformities, disputes, price) confronted with the supplier; feeds retention, improvement plan or exit.
Simple example: Nadia reviews OTIF and disputes each half-year with her key suppliers.
What it is not: judging on the latest incident instead of the period.
Reflex: one figure, one period, one confrontation — at each review.
In practice — Set up simple supplier scoring
- Choose your 5 most important suppliers (spend or criticality) and define 4 to 6 weighted criteria (e.g. quality 30, lead times 30, price 25, responsiveness 15).
- Score each supplier on measured facts (on-time deliveries, non-conformities, disputes over the last 6 months), not on impressions.
- Rank them: identify your best supplier (does it deserve more volume?) and your weakest (improvement plan or replacement?).
- Schedule the next (half-yearly) review and inform your key suppliers that they are evaluated — the effect on performance is immediate.
Ready-to-say script — announce evaluation to the supplier (1 min)
“To work over the long term, we now evaluate our key suppliers each half-year: quality, lead times, price, responsiveness, on facts. I will share your score and we will set a joint improvement goal together. The aim is more volume for the best.”
Say to the key supplier, calmly, then send the criteria grid in writing.
Copy-paste template — supplier scoring
SUPPLIER: _______________ | PERIOD: _______________
CRITERION 1 + WEIGHT: _______________ | SCORE / FACT: _______________
CRITERION 2 + WEIGHT: _______________ | SCORE / FACT: _______________
CRITERION 3 + WEIGHT: _______________ | SCORE / FACT: _______________
WEIGHTED TOTAL: _______________ | RANK: _______________
DECISION (volume / improvement / exit): _______________Small business / tight budget
4 criteria on a spreadsheet, scored on the last 6 months: no audit, just facts and a six-monthly review with the main supplier.
Algeria SME
Nadia adds location and import lead times to scoring: a cheaper distant supplier with erratic delivery loses lead-time points.
Agri-food import
Weight sanitary conformity and traceability heavily: one non-conforming batch stops all production.
Single critical supplier
Light half-day audit + dated improvement plan, while qualifying an alternative to avoid captivity.
✓ Best practices
- Set the weights before scoring: afterwards, you will unconsciously favour your preferred supplier.
- Score on dated facts (OTIF, quantified delays) rather than on “we get along well”.
- Share the score with the supplier: transparency is the best improvement lever.
✗ Common pitfalls
- Auditing everyone: you exhaust yourself on minor stakes — target strategic suppliers.
- Scoring on the latest impression (last incident or last good deed) instead of the period.
- Keeping a chronic underperformer out of habit for lack of a qualified alternative.
Key takeaways
- Select on EXPLICIT, weighted criteria: CQD + financial health + capacity + certifications + CSR — adapted to each family.
- The on-site audit (high stakes) reveals what the sales file does not say; the file declares, the visit proves.
- Evaluation is CONTINUOUS: OTIF, non-conformities, disputes, price — measured regularly and discussed.
- Evaluation serves to DECIDE: more volume to the best, improvement plans for average strategic suppliers, exit of chronic underperformers.
48h Challenge — apply tomorrow
Nadia gets out her spreadsheet: score your 3 main suppliers on 4 weighted criteria with the last 6 months' facts (template above). Then announce the six-monthly review to No. 1. 30 minutes is enough.
- I can name my weighted criteria without hesitating.
- I can explain why audits are reserved for high stakes.
- I have scored 3 suppliers and scheduled the next review.
Frequently asked questions
How do you assess financial health without being an accountant?
Look at three simple signals in published accounts: revenue rising or falling, positive net income, positive equity. Add an affordable credit-insurer rating and behavioural signals: new advance payments, eagerness to be paid, simultaneous quality/delivery deterioration, market rumours. Accumulation raises the alert, not one isolated signal.
Should you audit all your suppliers?
No. Routine mass: no audit, passive evaluation. Significant suppliers: half-yearly scoring on real data + documents (certificates, attestations). Strategic or at-risk only: light half-day audit, sometimes pooled or delegated, before listing or after deterioration.
Which tool makes supplier selection objective and comparable?