# Supplier Evaluation Criteria

## Scoring Rubrics by Dimension

### 1. Cost Competitiveness (Recommended Weight: 25%)

Evaluates the supplier's landed cost relative to competitors and your target cost.

| Score | Criteria |
|---|---|
| 9-10 | Landed cost 10%+ below target; best price among all evaluated suppliers; volume discount tiers available |
| 7-8 | Landed cost within 5% of target; competitive with top suppliers; some room for negotiation |
| 5-6 | Landed cost meets target but no margin buffer; middle of the pack among suppliers |
| 3-4 | Landed cost 5-15% above target; would need significant negotiation or volume increase to be viable |
| 1-2 | Landed cost 15%+ above target; not cost-competitive for this product category |

**Data Sources:** FOB quotation, freight estimates, duty calculations, payment term value

**Red Flags:** Price significantly below market (quality corners being cut), no volume discounts available, hidden fees in payment terms

### 2. Quality & Certifications (Recommended Weight: 25%)

Evaluates the supplier's ability to consistently deliver product that meets your quality standards.

| Score | Criteria |
|---|---|
| 9-10 | ISO 9001 + product-specific certs (FDA, CE, UL); documented QC process; <2% defect rate; willing to share factory audit reports; successful sample evaluation |
| 7-8 | Relevant product certifications; reasonable QC process; 2-4% defect rate; satisfactory sample quality |
| 5-6 | Basic certifications only; QC process exists but undocumented; 4-6% defect rate; samples required minor revisions |
| 3-4 | Missing key certifications; limited QC documentation; 6-10% defect rate or no defect data; samples had notable issues |
| 1-2 | No relevant certifications; no formal QC process; >10% defect rate or product fails basic quality tests |

**Data Sources:** Certification copies, factory audit reports (BSCI, Sedex, SA8000), sample evaluation results, third-party inspection reports, customer references

**Red Flags:** Reluctance to provide samples, no third-party inspection allowed, certifications that can't be verified, unwillingness to discuss defect rates

### 3. Lead Time & Reliability (Recommended Weight: 15%)

Evaluates total time from order to delivery and the supplier's track record for on-time fulfillment.

| Score | Criteria |
|---|---|
| 9-10 | Total lead time (production + shipping) under 30 days; 95%+ on-time delivery history; proactive shipment tracking provided |
| 7-8 | Total lead time 30-45 days; 85-95% on-time delivery; regular production updates |
| 5-6 | Total lead time 45-60 days; 75-85% on-time delivery; updates provided when requested |
| 3-4 | Total lead time 60-90 days; 60-75% on-time delivery; limited communication during production |
| 1-2 | Total lead time 90+ days; <60% on-time delivery; frequent delays with poor communication |

**Data Sources:** Quoted production time, shipping transit time estimates, historical on-time delivery data, reference checks with other buyers

**Key Considerations:**
- Factor in seasonal delays (Chinese New Year adds 3-4 weeks, Ramadan affects Middle East/South Asia)
- Port congestion patterns (US West Coast peaks in Q3-Q4)
- Supplier's current capacity utilization (overbooked factories miss deadlines)

### 4. Communication & Responsiveness (Recommended Weight: 10%)

Evaluates the ease and quality of communication with the supplier.

| Score | Criteria |
|---|---|
| 9-10 | Fluent English (or your language); responds within 4 hours during business days; dedicated account manager; proactive about issues |
| 7-8 | Good English; responds within 8 hours; consistent point of contact; addresses concerns when raised |
| 5-6 | Functional English; responds within 24 hours; communication sometimes requires follow-up for clarity |
| 3-4 | Basic English with frequent misunderstandings; 24-48 hour response time; no consistent point of contact |
| 1-2 | Language barrier causes regular miscommunication; 48+ hour response time; difficult to reach |

**Data Sources:** Response time during RFQ process, email/message quality, video call capability, timezone overlap assessment

**Key Considerations:**
- Timezone overlap: At least 2-3 hours of shared working hours is ideal
- Communication tools: WeChat (China), WhatsApp (global), email
- Escalation path: Can you reach management if issues arise?

### 5. Risk Profile (Recommended Weight: 15%)

Evaluates geopolitical, logistical, and business risks associated with the supplier and their region.

| Score | Criteria |
|---|---|
| 9-10 | Politically stable region; no extra tariffs; multiple shipping route options; diversified client base; financially stable |
| 7-8 | Generally stable with minor risk factors; standard tariff regime; adequate logistics infrastructure |
| 5-6 | Some notable risks (trade tensions, single port dependency); manageable with planning |
| 3-4 | Significant risk factors (active trade disputes, political instability, limited logistics options); requires active mitigation |
| 1-2 | High-risk environment (sanctions risk, active conflict, severe infrastructure limitations); sourcing here requires strong justification |

**Risk Categories to Evaluate:**
- **Trade Policy:** Tariffs, anti-dumping duties, sanctions, trade agreement changes
- **Geopolitical:** Political stability, regional conflicts, diplomatic relations
- **Natural Disaster:** Earthquake, typhoon, flood risk for the specific region
- **Currency:** Exchange rate volatility and hedging options
- **Single Point of Failure:** Is this the only viable supplier in the region?
- **IP Protection:** Legal framework for intellectual property in the supplier's country
- **Labor/Compliance:** Child labor risk, working condition standards, environmental compliance

### 6. Scalability & Flexibility (Recommended Weight: 10%)

Evaluates the supplier's ability to grow with your business and adapt to changing requirements.

| Score | Criteria |
|---|---|
| 9-10 | Can handle 5-10x your current volume; flexible MOQ for new SKUs; willing to hold safety stock; multiple production lines |
| 7-8 | Can handle 3-5x current volume; reasonable MOQ flexibility; open to inventory programs |
| 5-6 | Can handle 2-3x current volume; standard MOQ with some negotiation room |
| 3-4 | Limited growth capacity (1.5-2x current volume); rigid MOQ; slow to adapt to spec changes |
| 1-2 | Already near capacity; high rigid MOQ; unwilling or unable to accommodate changes |

**Data Sources:** Factory capacity data, current utilization rate, number of production lines, willingness to discuss growth plans

## Composite Score Calculation

```
Composite Score = (Cost Score × 0.25) + (Quality Score × 0.25) + (Lead Time Score × 0.15) 
                + (Communication Score × 0.10) + (Risk Score × 0.15) + (Scalability Score × 0.10)
```

### Interpretation Guide

| Composite Score | Recommendation |
|---|---|
| 8.0-10.0 | Strong candidate — proceed to negotiation and sample order |
| 6.5-7.9 | Viable candidate — suitable as primary or backup supplier depending on competition |
| 5.0-6.4 | Marginal — consider only if better options are unavailable or as emergency backup |
| Below 5.0 | Not recommended — significant weaknesses outweigh potential benefits |

### Weight Adjustment Guidelines

Adjust weights based on your business situation:
- **Price-sensitive launch:** Increase Cost to 35%, reduce Communication and Scalability
- **Premium brand:** Increase Quality to 35%, reduce Cost to 15%
- **Fast-moving trends:** Increase Lead Time to 25%, reduce Scalability
- **High-risk category:** Increase Risk to 25%, reduce Cost to 20%
- **Rapid growth phase:** Increase Scalability to 20%, reduce Lead Time to 10%