What are the best criteria to use for a supplier selection matrix in your industry?

1) Quality. 2) Cost. 3) Delivery Performance. 4) Financial Stability. 5) Technical Capability. 6) Reputation and References. 7) Communication and Responsiveness. 8) Sustainability and Ethical Practices. 9) Flexibility and Operations Scalability. 10) Innovation. * These criteria can be weighted based on industry specific needs and priorities, allowing for a comprehensive evaluation of potential suppliers.

Well it depends from industry to industry. But for me following are the 5 major dimensions to use supplier selection/ supplier performance: 1. Cost 2. Quality 3. Delivery 4. Flexibility 5. Innovation

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 I use the following criteria: • Unit price • Lead time • Usual quality (I rate my suppliers with a grade: A, B, or C) • Communication level (Similarly, they're rated with an A, B, or C grade) • Delivery cost • Additional costs (prototyping, sampling, molds, etc.) To be useful, you must have a rating system for the criteria that are qualitative, otherwise, you're comparing apples with oranges.

Such a useful and practical real life tool to use! I used this to rank supplier for a sourcing activity and used the following criteria - capacity - OTD - Ease of business (how responsive are they, does the supplier turn issues around quickly, etc.) - cost - lead time

I work in manufacturing industry, so a robust supplier selection matrix relies on crucial criteria. Reputation, both in the industry and based on past performance, matters greatly. Prioritize quality assurance, cost factors, reliability, scalability, financial stability, technological prowess, and geographical considerations. Reputation, environmental and social responsibility, and communication skills are vital. Tailor a weighted scoring system to align with industry and business needs, regularly updating criteria for market changes and evolving priorities.

Os pesos para cada critério podem variar de um material para o outro. Inclusive eu sugiro que a sua matriz de decisão deve ser revisitada a cada novo processo de seleção dos fornecedores que você atuar, em geral o comprador é responsável por mais de um tipo de categoria de materiais, por isso a importância de respeitar a individualidade e a característica de cada grupo de mercadorias. Na prática se você estiver escolhendo um fornecedor para um produto mais técnico, que requer o atendimento de normas ou especificações mais técnicas, de maior peso para os critérios relacionados às áreas técnicas. Se por outro você estiver negociando um produto com características de commodities você pode priorizar o preço e a logística por exemplo.

I score all criteria and assign a weight based on previous orders, or an estimation for new suppliers. Next, you'll have to assign weights to the criteria. You might value quality more than on-time delivery or communication quality. It all comes down to selecting your criteria specifically for your products. This method provides a good overview, but it's important to apply the same criteria to all suppliers. Otherwise, this method won't be accurate, a common pitfall for many buyers.

Criteria weightning can be done by percentage: - Quality: 30% - Supply chain: 20% - Pricing: 30% - Technology: 10% - Other: 10% Tayloring a weight scoring is very important, since there's no magic formula. This will depend on industry and your own needs.

Additionally, utilizing techniques such as pairwise comparison or analytical hierarchy process (AHP) can provide a more structured approach to assigning weights, especially when dealing with a large number of criteria or when there's uncertainty about their importance. Periodically reassessing and adjusting these weights based on changing business needs and market conditions can help maintain the relevance and effectiveness of supplier selection criteria over time.

Usually you assign weights in a form of a matrix, in which for automotive, the quality and the products are in the highest ranking. Then it comes to technology, pricing and commercial terms.

Um ponto muito importante na matriz de decisão é que no momento da avaliação dos critérios de cada fornecedor, em geral, o comprador ainda não visitou as fábricas. Sendo assim sugiro que você, tome algumas precauções: 1° Tenha claro os critérios + estratégicos e valide se realmente as pontuações estão coerentes 2º Naqueles casos que tiver outras áreas visitando o fornecedor, peça um feedback sobre a situação geral do fornecedor 3º Leve sempre em consideração o seu ranking de fornecedores, identifique se há discrepâncias.

Supplier evaluation is key for the process. First step is to stablish communication, which will be the conductor vector for the whole process. Without honest, transparent communication the supplier will not be open to be evaluated. After first stablishment, signing NDA, and then proceed with evaluation processes such as audits for example.

Along with rating, i would suggest to assign weightage to the criteria to arrive at a weighted average scoring followed by rating

One suggestion I find useful is to, for various reasons, keep cost out of the initial scoring. The reason behind it is that many stakeholders tend to focus primarily, if not solely, on prices, yet optimizing this area is still necessary. What I do is rating suppliers based on criteria from my own scorecard and only then considering the prices. I calculate the total costs of each quote to compare the absolute value of an order, rather than just the unit cost, which doesn’t account for the additional costs that might vary from one supplier to another. Following this, I initiate price negotiations to encourage the highest-ranking supplier to match the lowest absolute value cost among the suppliers. Does that make sense?

Weighted average of the scores based on the weightage % that is provided for each of the criteria would indicate true value that will help in decision making