1. Supplier Evaluation
CONSTRUCTION SUPPLY CHAIN
MANAGEMENT (MGT60803/QSB 2433)

2. Objectives Today
• Why evaluate supplier performance?
• How to evaluate?
• Performance data
• Evaluation criteria
• Carter’s 10Cs concept
• Discussion
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3. Why Evaluate Supplier
Performance?
• There are various reasons for the evaluation of
performance being important.
1.Evaluation can significantly improve supplier
performance.
2.Evaluation assists decision making regarding
when a supplier is retained or removed from
an approved list.
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4. Why Evaluate Supplier
Performance?
3. Evaluation assists in deciding with which
suppliers a specific order should be placed.
4. Evaluation provides suppliers with an
incentive for continuous improvement and
prevents performance slippage.
5. Evaluation can assist in decisions regarding
how to distribute the spend for an item among
several suppliers to better manage risk.
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5. How to Evaluate?
• Key Performance Indicators (KPIs) is a common way
to evaluate supplier by indicating the supplier’s
performance of the criterion set.
• The 2 main considerations when using KPIs are:
How to collect the performance data
What are the criterions and weight of each criterions
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6. Performance Data
• Performance data could be collected using the
following methods:
Subjective data
Survey method
Comparative method
Weighted point
Percentage-based method
Cost-based method
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7. Evaluation Criteria
• The evaluation criterion are based on the type
of business, purchase and goods or services.
• Carter’s ten Cs model can be general
guidelines of the supplier evaluation criterion.
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8. Carter’s 10Cs
1. Competence
•Reputation
•Accreditations
•Equipment
•Trading history
•Qualifications
•Training
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9. Carter’s 10Cs
2. Cost
•Variable Costs (VC)
•Fixed Costs (FC)
•Profit (Revenue minus Expenses)
•Break even point (Revenues needed to cover
costs/expenses)
•Cost analysis (breaking down cost summary)
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10. Carter’s 10Cs
3. Capacity
•Flexibility
•Personnel / Manpower
•Lead times
•Plant & machinery
(Present & Future demands)
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11. Carter’s 10Cs
4. Commitment to Quality
•Total Quality Management (TQM) is a comprehensive
and structured approach to organizational
management that seeks to improve the quality of
goods and services through ongoing refinements in
response to continuous feedback.
•ISO 9000 is a series of standards, developed and
published by the International Organization for
Standardization (ISO) that define, establish and
maintain an effective quality assurance system.
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12. Carter’s 10Cs
5. Consistency
•Reliability
•Control systems / standards
•Customer feedback
(Ability to always provide right products)
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13. Carter’s 10Cs
6. Clean / Housekeeping
•Environment
•Accident rate
•Hygiene
•Legislative
•Work Management and flow
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14. Carter’s 10Cs
7. Control of Key Processes
•Inventory
•Marketing
•Quality
•Procurement
•Operations
•Distribution
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15. Carter’s 10Cs
8. Cash (Financial stability)
•Profitability
•Accounts
•Length of established
•Customers
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16. Carter’s 10Cs
9. Culture & Relationships
•Maturity
•Volume of business
•Communication aspects
10. Communication
•ERP (Enterprise resource planning) – software to
manage the business
•Extranet
•E-procurement
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