A new model for continuous evaluation of suppliers with real execution data

Abstract

Supplier evaluation is a significant work for a company in order to enhance productivity and profitability. When a well-managed supplier evaluation is developed, this has a significant impact on the competitiveness of the entire supply chain. By examining the literature, it was seen that a great deal of papers are related to evaluation during new supplier selection process. However, there is a scarcity of studies that evaluate performance depending on the difficulty. The purpose of this paper is to focus on performance evaluation of the suppliers that are being currently worked with. In this context, Enterprise Resource Planning usage is investigated in order to collect and track real-time data for supplier evaluation systems, especially examined small- to medium-sized enterprises. With this in mind, this study conducts a questionnaire on the small- to medium-sized enterprises. Subsequently, by referring to the results of this study, a new evaluation model with dynamic structure is developed utilizing Enterprise Resource Planning, which constantly reviews suppliers at each delivery. Moreover, the developed model has been implemented in a medium-sized machine manufacturing company, integrating it into the purchasing module of its Enterprise Resource Planning system. The managers of the company have confirmed the proposed model and the manufacturing company is continuously doing a systematic evaluation with this model, thus facilitating to attain the goals of supply chain management such as reduction of inventory cost, increasing profit margin and customer satisfaction.