Supplier Selection Strategies and Criteria

Supplier selection criteria for a particular product or service category should be defined by a “cross-functional” team of representatives from different sectors of your organization. In a manufacturing company, for example, members of the team typically would include representatives from purchasing, quality, engineering and production. Team members should include personnel with technical/applications knowledge of the product or service to be purchased, as well as members of the department that uses the purchased item.

Common supplier selection criteria:

• Previous experience and past performance with the product/service to be purchased.

• Relative level of sophistication of the quality system, including meeting regulatory requirements or mandated quality system registration (for example, ISO 9001, QS-9000).

• Ability to meet current and potential capacity requirements, and do so on the desired delivery schedule.

• Financial stability.

• Technical support availability and willingness to participate as a partner in developing and optimizing design and a long-term relationship.

• Total cost of dealing with the supplier (including material cost, communications methods, inventory requirements and incoming verification required).

• The supplier's track record for business-performance improvement.

• Total cost assessment.

Methods for determining how well a potential supplier fits the criteria:

• Obtaining a Dun & Bradstreet or other publicly available financial report.

• Requesting a formal quote, which includes providing the supplier with specifications and other requirements (for example, testing).

• Visits to the supplier by management and/or the selection team.

• Confirmation of quality system status either by on-site assessment, a written survey or request for a certificate of quality system registration.

• Discussions with other customers served by the supplier.

• Review of databases or industry sources for the product line and supplier.

• Evaluation (SUCH AS prototyping, lab tests, OR validation testing) of samples obtained from the supplier.