Transparency for your supply chain: With digital supplier rating for Supply Chain 4.0

The right choice of suppliers and the optimization of existing relationships are important success criteria within the supply chain. To obtain a meaningful overall picture, supplier evaluation is an important component of supplier management. Transparency within the supply chain processes plays an increasingly important role.

In this article we explain how to achieve the necessary transparency of supplier rating through digitization and what advantages it brings on the way to your Supply Chain 4.0.

The Classic Supplier Evaluation

The supplier evaluation is carried out with the help of specific evaluation criteria, which can vary depending on the supplier, e.g. delivery dates and quantities, product quality or ability to deliver.

The supplier evaluation makes the performance of a supplier traceable and gives you the possibility of classification. In this way, the performance of existing and new suppliers is systematically evaluated and can be compared. This allows you to select and decide in advance which supplier is worth entering into further negotiations and which supplier you should part with.

The Modern Digitalized Supplier Evaluation

In modern supplier management, the sustainability of supplier selection and evaluation plays an increasingly important role. Consumers and companies are demanding more and more transparency across the entire supply chain, and the demands on the company's purchasing and quality management are also constantly increasing. But how can your company meet these demands?

In the course of time, digital media have become more and more important. In recent years, digitization has also arrived where it is urgently needed: The entire supply chain is being transformed into Supply Chain 4.0 with the help of digital tools.

Since digitization makes many processes much easier, this is not surprising. In the area of the supply chain, too, many processes can be mapped digitally and can make everyday work easier. This also applies to the process step of supplier evaluation.

So if you switch to a web-based supplier rating, you automatically provide the desired transparency. In addition, the digitalization of your supply chain offers many more advantages for your business processes, which we will introduce to you in the course of this article.

The supplier evaluation is the central element of the supply chain, as it is the linchpin for e.g. adherence to delivery dates, quantity and product quality. The evaluation process is an accompanying process during the entire cooperation with the supplier.

You can strengthen the supplier relationship through a digital supplier platform: Make the current status of the supplier evaluation accessible online and enable the supplier to see which areas the evaluation consists of and how the evaluation result is arrived at.

This gives your supplier the opportunity to act proactively by retrieving the relevant information himself. He always receives an up-to-date status, knows where he stands and where there is room for improvement - strengths and weaknesses can be worked out. The active pointing out of individual errors or confusing e-mail traffic is no longer necessary. In addition, the supplier has the opportunity to view the progress of his evaluations and to react accordingly and take appropriate measures.

This creates a classic win-win situation: You have the security for your production process and your supplier has the advantage of optimal preparation and continuous improvement.

Create Clear Standards

Use the software-supported supplier evaluation to determine the evaluation criteria that suit your company. For example, you can define supplier groups and the weighting of the criteria for soft facts (e.g. flexibility) and hard facts (e.g. complaints) individually according to your circumstances. The formulas for calculating the key figures can be retrieved in digital form by both sides and are therefore transparent and always up-to-date. This makes it clear to both sides which expectations must be met and where there is a need for development.

Making Decisions Easier Through Automated Processes

The digitalization of supplier management enables the automation of important recurring processes. For example, the automatic creation of various analyses, reports and evaluation histories makes the supplier's development status visible.

The automatic monthly calculation of supplier key figures provides you with a constantly updated overview of the status of your suppliers, their quality and development.

Based on the comparable criteria, it is possible for you to make a fact-based decision independent of subjective opinions.

History Tracking

In a web-based supplier rating system, all ratings are stored centrally in digital form, so you can track the history of the ratings seamlessly. Some web solutions even allow the optimization process to be displayed visually, for example as a traffic light status.

Simplified work processes

If the number of evaluations carried out increases, there is a risk that related documents will quickly become confusing. The software-based form of supplier evaluation provides a remedy: all data is stored in a central data collection and can therefore be accessed easily, quickly and always up-to-date.

You have a good overall view and can always access exactly the data you need and process it quickly and easily.

Conclusion

Supplier management is in a state of flux: the desire for ever greater transparency throughout the entire supply chain is virtually pushing digitalization to the forefront. This not only creates transparency, but also simplifies many processes.

With web-based supplier evaluation, the supplier has access to the results of his evaluations. This enables them to take independent action and initiate measures for improvement. This type of open communication also helps to strengthen supplier loyalty.

Since you can define the evaluation criteria in the software-supported supplier rating system to suit your company, clear standards can be created. Fully automated processes provide a constantly updated overview and facilitate decision-making.

By digitizing your supplier rating, you not only achieve the required transparency, but also a process improvement along your supply chain towards Supply Chain 4.0, which ultimately leads to an increase in your product quality.