Supplier Evaluation

Once potential suppliers are identified, they need to be evaluated for selection of right vendor.

Key factors to be considered for supplier evaluation:



Quality of goods/ services to be provided by the vendor is one of the most important factors while selecting vendors, as quality of input/ raw materials/ service can have a direct impact on the quality of output.

Various aspects to be considered while evaluating the quality of vendors include:

  • Conformity to specifications: The product or service must conform to the specifications identified in the request for proposal and purchase order. This can be assessed through physical inspection of facilities/ sample products of the vendor.

  • Industry standard product/service: The vendor’s products and services should be consistent with the industry benchmarks.

  • Reliability: The vendors’ products/ services should be reliable. This can be assessed through feedback on vendors’ market reputation from external sources.

  • Durability: Vendors’ products should be comparable on durability. This can be assessed through feedback from external sources and in conjunction with warranty offered by the vendors.

  • Warranty: Vendors can be assessed on the reasonable warranty provided by them for their products.

  • Compliance: The vendor should be able to comply with terms and conditions as stated in the purchase order.


Quantity and Delivery

Quantity of goods is another factor on which vendors should be evaluated. However, capability to deliver goods in right quantity should be assessed in conjunction with the time taken for delivery.

  • Time: The vendor should be able to supply the goods/ services in desired time. Vendors’ past experience in fulfilling order deliveries on time should also be assessed.
  • Quantity: The vendor should be able to supply all quantity desired by the firm. This can be assessed by the production capacity/ past experience of the vendor.
  • Packaging: Packaging done by the vendor should be durable, properly marked, and undamaged. Pallets should be of proper size with no overhang.
  • Urgent delivery: Vendors can also be evaluated on their capability to deliver products in case of any urgency.


Service offered by the vendor, during and after purchase, is also an important consideration while evaluating vendors.

  • Sales Representatives: At the time of sale, the sales representatives of the vendor firm should be able to convince the management about their products; they should be able to display their capabilities by providing adequate information on the products offered, prices and technical information.
  • Product Knowledge: The vendor must understand the product requirement of the firm and able to answer various queries related to fulfillment of firm’s requirements.
  • After-Sales Service: Vendors can be assessed with respect to the after sales services offered by them, including regular technical support and support during any emergencies. The vendor should be capable of resolving any issues in shortest possible time.


This is one of the most important factors for selection of vendors. Usually, if most of the vendors are equally good in terms of product quality, firm’s delivery and service, the vendor quoting the lowest price is often selected.


•    Vendor Rating,