Selection criteria for Vendors

There are different types of vendors that organisations deal with such as suppliers of materials and equipments, service providers, consultants and contractors etc. 

It is essential that before shortlisting a vendor (for calling for negotiations), proper evaluation of vendor is done systematically on important parameters ,particularly for inducting vendors for high value recurring buying of materials or services or for construction projects. 

Giving below important aspects that must be followed either through personal visits to vendors plant/office or through dialogues to assess vendor's capability:-

1. Technical  infrastructure  ie use of suitable equipments, tools, jigs & fixtures & appropriate licensed software for production, installation & servicing of material to be purchased.
2. Process controls at vendor‘s end for ensuring quality during production, installing & servicing or for rendering services under scope 
3. System for compliance with reference standards/quality plans
4. Monitoring & control of process parameters & end product requirements or for services requirements
5. System for approval of  manufacturing or service rendering processes & equipment
6. Criteria for workman ship & documentation  
7. Equipment maintenance system to ensure process capability
8. Leadership profile
9.  International /National Quality certification of the company and it's products and services 
10. Global footprint in terms of manufacturing operations or offices or customers or vendor associates.
11. Ability and reputation in meeting legal compliances
12. Skill & knowledge of vendor ‘s teams
13. Experience in supplying similar materials or services  to corporate clients/exports etc 
14. Industry standing/reputation /brand name etc

Unethical / Fraud prone practices

1.    Missing  out assesment on many parameters by Assigning junior team members or inappropriately skilled persons thereby potential induction of non capable vendor/consultant or contractor .
2.    In collusion with potential vendor, suppressing actual observations in vendor assessment report by assesing team member and giving biased opinion to shortlist   preferred vendor are unethical practices 
3.   Senior management instructing vendor shorlisting  team to include vendor / consultant/relative who are their friends or relatives  and asking them to skip their formal  techno-commercial  evaluation.

Shortlisting a vendor is as critical and important as calling an  employee for interview without assesing his/her  qualifications and capabilities. Shortlisting and calling a vendor for negotiations ,without proper evaluation is all the more important if the vendor/consultant or contractor is going to be associated for  medium or long term supply of inputs /products or rendering of services.