Benchmark Suppliers

Do you benchmark suppliers?
A. We just stick with the suppliers we have.
B. We know it’s a good idea, but we don’t know how to benchmark alternative suppliers.
C. We have piecemeal information to partially benchmark alternative suppliers.
D. We benchmarked alternative suppliers on price, quality and service levels in the past year.
E. We maintain accurate current information to benchmark alternative suppliers on price, quality, availability, selection, reliability, functionality, relationship and service levels.
[Score:  A=0, B=1, C=2, D=3 and E=4]
Why is this question important?

A benchmark is defined as “something that serves as a standard by which others may be measured.”

The first step in the benchmark development process is to design the benchmark audit document which is nothing more than an in-depth questionnaire which allows you to gather information on suppliers to compare them on:

  • Price
  • Quality
  • Availability
  • Selection
  • Reliability
  • Functionality
  • Relationship
  • Service levels
  • etc.

Other areas should be added which are appropriate and important to your business.

A simple benchmark process might comprise the completion of the following grid.

In-depth Benchmarking.

To take an example – Quality Assurance – questions could include:

  • Does the supplier have a documented quality system in place?
  • Is a copy of their Quality Assurance manual available for you to review?
  • Is there a continuous quality improvement plan in place?
  • Does the supplier set annual quality target objectives with transparent measurements?
  • Does the supplier have a QA department and do they have the requisite authority to stop material at receiving, inspection, production and or final shipping?
  • etc.