Development of a Supplier Performance Evaluation Process in the Case Organization

Abstract

This thesis focuses on the development of a supplier performance evaluation process in the case organization, which does not have a standardize approach to measure existing supplier performance. The study is based on qualitative research methods. In the study, semi-structured surveys, interviews and management workshops were conducted. Furthermore, literature was used to get insight and knowledge into various standardized supplier evaluation approaches and best practice. The study was conducted based on three rounds of data collections. Data 1 focused on the current state analysis and examined the current approaches used in the case organization to evaluate supplier performance. In addition to knowledge about the supplier performance evaluation process and best practice, Data 2 focused on information collected from the stakeholders to build an actual proposal. The proposal was built based on co-development with management and purchasers to develop a supplier performance evaluation process to fit the organization’s needs. As a result, the supplier performance evaluation process was developed. Data 3 focused on the validation of proposal based on the feedback and development suggestions from the key stakeholders, coupled with the process simulation. With a standardized supplier performance evaluation process, the case organization is able to evaluate the existing suppliers. Furthermore, it allows them to measure at which level the existing suppliers fulfill their performance criteria. Thus, if some of the suppliers are not able to fulfill their performance, corrective actions can be applied. It can improve performance in the organization, decrease operational costs related to claims, delays, stock outs, and ensure other improvements.