The importance of evaluating your suppliers

The importance of evaluating your suppliers

José Echeverría – March 16, 2015

Working side by side with your suppliers is essential for continuous improvement. Strengthening the first link in your supply chain will make your organisation a lot more efficient. In order to achieve this goal, companies need reliable information to help them assess their suppliers and reach better negotiations with them.


Controlling the supply chain has become essential for the growth of companies. At the same rate suppliers are becoming key participants for reaching more efficient operations. Therefore, organisations have placed a special focus on achieving process optimisation involving suppliers and having firm evaluation criteria to assist in decision making when referring to suppliers.

Unfortunately, there are many businesses that assume the operation with their suppliers are precise and have no clear evaluation criteria, causing blindness that prevents them from continuous improvement. Consequently, organisations often fall into vicious circles; starting with material delays, affecting the responsiveness of the company and ending at the shortage of products for the customers, thereby, slowing the flow of money and making them unable to pay their suppliers.

For this reason, it is essential for companies to find global solutions to enable them, on one hand, operational control of suppliers and, in the other, to help them immediately assess all transactions and criteria necessary to make good decisions together. Hence, the organisations will not only gain internal control of operations with each provider, but they will also get useful tools for negotiating with them.

LOVIS has focused on finding innovative solutions through our Next Business Practices, including within these proposed solutions, tools for proper operation with suppliers, creating harmony in processes and allowing online and real time information. We do this through our Enterprise Operating System (EOS), which allows the registration of operations with suppliers on real time, detailing all the information for supply orders, product deliveries and returns, and accounts payable generated as a result of the transactions, among others.

In addition to carrying all transactional information with suppliers, the system lets us explore further information, such as delivery times by supplier and product, latest purchase prices, pending documents, among others. The system has tools that allow evaluating each of the suppliers, in addition to the ability for each user to create their own.

These tools help with accurate assessments of suppliers. For example, companies will now be able to measure the time required for an order to arrive, pending orders to be received, agreed delivery times with suppliers versus actual delivery times, changes in the purchase price of each material, parameters and supply conditions agreed with each supplier, among other indicators that help businesses make decisions regarding suppliers.

LOVIS, through its EOS, works with each organisation to improve their supply chain, from the suppliers proper evaluation to the integral improvement of the business and operation processes.