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There is no single, unique and fit-for-all formula for evaluating a supplier. However, the following important factors must be taken into account while awarding contract to any supplier:
You mean a Supplier you already have or a New Supplier?
For both the Supplier ?
Several techniques can be used to evaluate suppliers and measure performance.
The first step is to determine the attributes that should be considered. The company should focus on the attributes that it finds most important. Some attributes are easy to measure while others are not. A rule of thumb is to consider the total costs of ownership with a purchased product / service, not solely the purchase price. Some of the metrics that should be considered are quality, service, on time and in full delivery (OTIF), electronic integration with your company, confidentiality (especially for knowledge critical businesses), quick response time when there is an emergency, innovation, production flexibility (how can quickly response your demand changes), etc.