Measuring the Performance of Suppliers: An Analysis of Evaluation Processes

SUMMARY In the past, commonly used supplier evaluative criteria have focused on quality, service or delivery, and price. In recent years, the channels literature has indicated other areas, such as relationship factors, that may affect channel partner performance; yet, no known research has examined either the extent of formal supplier evaluation programs or the factors currently used in channel evaluation. The purpose of this research is to fill that void by determining the number of firms that have systematic evaluation systems and to examine the currently used supplier evaluation instruments — with a focus on whether or not channel relationship factors are considered — from a wide cross‐section of industries. Findings indicate that less than half of the responding firms have a formal supplier evaluation process in place, and that quality, supplier certification, facilities, continuous improvements, physical distribution factors, and channel relationship factors were the factors most commonly included in supplier evaluation programs.