Evaluation of vendors – checklist system

Some companies use a simple check list to evaluate their vendors. Designed to facilitate vendor rating from the stand-point of financial strength, size, product service, price, quality and the like, the check system is quite useful to evaluate suppliers. A typical list is given below:

Buyer’s Checklist for Evaluating Vendors:


Whether the supplier,

1. a reputable, stable and financially strong company
2. ability and integrity proved by past performance
3. able to effect cost savings along with product improvements

Technical capabilities

Will the supplier,

1. provide engineering assistance
2. analytical engineering help improve the efficiency of basic processes
3. provide design assistance
4. able to handle special needs and designs
5. able to contribute to general advancement through basic research

After-sale service

1. Does the supplier has a service shop organization available as and when required?
2. Is emergency service available?
3. Will renewal parts be available when needed?


Will / Can the supplier,

1. assure on-time delivery
2. has stocks available locally on short notice
3. has a location advantage to the company
4. plan shipment to minimize inventories
5. be depended upon to provide steady flow of products or materials

Buying Convenience

Does the supplier,

1. offer a full line of related products
2. package his product conveniently for use
3. has a local sales contact who is qualified to help the company and can call upon specialists for difficult problems
4. help in cutting acquisition such as qualifying visits, telephone calls, lab tests, incoming inspection, spoilage and waste, rejects and complaints

Sales Assistance

1. Does the supplier help develop mutual markets? Will he recommend the company’s product?
2. Will the appearance of the supplier’s product enhance the appearance of company’s product?

All the above techniques, categorical plan, weighted plan, critical incidents and the checklist system involve varying degrees of subjectivity and guesswork. The mathematical treatment of data in one plan often tends to obscure the fact, that the results are no more accurate than the assumption on which the quantitative data are based. In the final analysis, therefore, supplier evaluation must represent a combined appraisal of facts, quantitative computations and value judgments. It simply cannot be achieved effectively by formulas alone.

Besides, the vendor appraisal is concerned with the adequacy of the suppliers with whom the company is currently dealing. Decision taken many years ago may well have been correct at that time. However, since then, things may have changed. For example, additional qualified suppliers may be available, new processes may have been developed, new markets have opened up and the currency relationships may have changed.

A most important part is that, in the key decision areas, both long and short term effects are considered and subsequently renewed. With a new technology, and a ‘shrinking world’ such reviews may well need to be carried out more frequently in future.