Sertus Supplier Ratings (SSR) are used to measure the capacity and capability of suppliers across a multitude of industries. The purpose is to be able to standardize supplier competency and compare factories from different backgrounds. Sertus uses these ratings, together with price quotes and other considerations, like location and logistics implications, to assess the attractiveness of quotes. The rating system is based on a score of up to 800 points and is subsequently adjusted to a 10 point scale for ease of use.
2. Jay Peirce Sertus Supplier Ratings
(305) 215-3414 September 2005
jay@sertusllc.com
A Supplier Rating System
Sertus Supplier Ratings (SSR) are used to measure thorough analysis of all operating procedures are
the capacity and capability of suppliers across a included in our rating system and we pay particular
multitude of industries. The purpose is to be able attention (and scores are weighted accordingly) to
to standardize supplier competency and compare quality assurance and quality control procedures
factories from different backgrounds. Sertus uses and equipment, both for inbound receipts of raw
these ratings, together with price quotes and other materials and inputs as well as for in-process and
considerations, like location and logistics finished goods inspections. International trade
implications, to assess the attractiveness of quotes. capacity and experience is ascertained as well as
The rating system is based on a score of up to 800 experience with destination market norms,
points and is subsequently adjusted to a 10 point standards and other import criteria. The rating
scale for ease of use. system accounts for certifications (e.g. ISO9001,
OHSAS18001, CSR, COC – Code of Conduct,
Sertus ratings contemplate a wide array of criteria FSC, PEFC, BSCI, SEDEX, SEMTA, ETI,
and the methodology has grown in sophistication SA8000, ICTI, C-TPAT, GSV, Wal-Mart FCCA,
over the years as we continue to refine the system etc.) and scores are adjusted to reflect years in
to accurately reflect changes in industry practice. compliance. Sertus also considers references from
Our ratings are based mostly by information existing clients as very important. We look closely
furnished by the supplier being reviewed, although at the type and length of relationships that are
there are many pieces of information that we maintained by entities under review. Product
obtain independently. Sertus assigns a rating only innovation scores are tabulated and concentration
when there is adequate information available to risk is also considered.
form a credible opinion, and only after applicable
quantitative, qualitative, and legal analyses are The Ratings Process
performed.
Ratings are required for any factory with which
The Analytical Framework Sertus is currently working or where a working
relationship is anticipated. A factory audit is
The analytical framework is divided into several performed and all information gathered during the
categories to ensure that salient qualitative and audit is captured in our audit database. A ratings
quantitative issues are considered. Proper scorecard is completed and the factory rating is
assessment of the capability of any supplier under calculated. Ratings must be approved by our
evaluation includes a thorough review of business Ratings Committee and once approved are
fundamentals, including an examination and uploaded into the Ratings Database. All ratings for
scoring of several criteria that measure the active suppliers are reviewed at least on a yearly
survivability of the entity and ultimately the basis unless a material change in condition would
capacity to absorb refunds in any potential dispute warrant a more frequent review.
that might arise. Our assessment involves an
analysis of the supplier’s vulnerability to Use of Ratings
technological change, labor unrest and regulatory
action. Industries that have long lead times or that SSRs are utilized to assess the attractiveness of
require a fixed plant of a specialized nature face quotes received by existing and prospective
heightened risk. We review management suppliers. In determining selection of primary and
experience, effectiveness, and oversight. A secondary suppliers for a particular product, Sertus
3. Jay Peirce Sertus Supplier Ratings
(305) 215-3414 September 2005
jay@sertusllc.com
will also review other criteria that are not
specifically incorporated into the SSR. The rating
will help determine the overall overhead
transferred in (OTI) on a particular piece of
business. For example, factories offering a low
price but that score low SSRs will require a higher
OTI due to greater QA/QC resources that are
needed to ensure on-time delivery. The OTI
adjustment to price may no longer make the “low
price” supplier the most attractive alternative.
There are also other elements that impact the OTI,
like factory location (which impacts the direct
expense of sending QA/QC personnel for
inspections, the inland freight expense to get
product to port etc.) or other services that Sertus
may be required to attach to an order because the
supplier is not capable of including them or not
capable of meeting Sertus standards for these
services (e.g. printing, artwork design, etc.).
For more information, please contact
info@sertusllc.com or visit www.asiatradepro.com