Managing your supply chain means that you have all the tools set up to provide you with awareness in order to make valuable decisions for your suppliers and your business. ASCOR's suggested indicative tools are defined below:
Pre-Qualification Questionnaire
A questionnaire, usually completed by the supplier prior to any supplier engagement with the business. It aims to identify the fundamental areas, such as financial viability, competence, geographical coverage, resources, qualitative accreditations (i.e. ISO), Insurance, Liabilities, important international, national, local regulation compliance (i.e. Modern Slavery Act, Equal Opportunities) etc. This can be built as per your company’s critical requirements.
Contract
An official document duly signed by both parties. The simplest form of a contract between a business and their supplier should include clear information about the framework agreement, costs and a detailed description about expectations and obligations for both parties. The contract should be followed by periodic meetings between the Customer and the Supplier to ensure compliance with the terms and conditions and provide accurate information for the Supplier Evaluation Scorecard (see below).
Risk Profile
Every organisation should conduct due diligence to ensure that the supplier that they will work with either in the short or long term, will be risk free or, at least, have a manageable level of risk. Any risk profile should be always be communicated in advance and agreed on; the areas to be scored together with the supplier. Specific actions should be agreed with the supplier to ensure that they will mitigate any risks accordingly and achieve specific progress until elimination (where possible).
Framework
The agreement between the two parties on what exactly the supplier is expected to deliver during the period of the collaboration.
Service Level Agreement (SLA) – if applicable
A more detailed agreement about specific aspects of the framework and the contract that would need to be followed by the supplier. Usually, it has a quantitative element, like a scorecard (x/100, %, fixed score, etc) and it is helpful during periodic supplier evaluation meetings.
Supplier Evaluation Scorecard
A scorecard captures the areas that the business and the supplier have agreed from the beginning that are important to be measured. The scorecard would need to reflect the pragmatic picture of the supplier and would always need to be supported by facts in order to ensure objectivity, transparency, and collaboration for improvement and development.
Pre-Qualification Questionnaire
A questionnaire, usually completed by the supplier prior to any supplier engagement with the business. It aims to identify the fundamental areas, such as financial viability, competence, geographical coverage, resources, qualitative accreditations (i.e. ISO), Insurance, Liabilities, important international, national, local regulation compliance (i.e. Modern Slavery Act, Equal Opportunities) etc. This can be built as per your company’s critical requirements.
Contract
An official document duly signed by both parties. The simplest form of a contract between a business and their supplier should include clear information about the framework agreement, costs and a detailed description about expectations and obligations for both parties. The contract should be followed by periodic meetings between the Customer and the Supplier to ensure compliance with the terms and conditions and provide accurate information for the Supplier Evaluation Scorecard (see below).
Risk Profile
Every organisation should conduct due diligence to ensure that the supplier that they will work with either in the short or long term, will be risk free or, at least, have a manageable level of risk. Any risk profile should be always be communicated in advance and agreed on; the areas to be scored together with the supplier. Specific actions should be agreed with the supplier to ensure that they will mitigate any risks accordingly and achieve specific progress until elimination (where possible).
Framework
The agreement between the two parties on what exactly the supplier is expected to deliver during the period of the collaboration.
Service Level Agreement (SLA) – if applicable
A more detailed agreement about specific aspects of the framework and the contract that would need to be followed by the supplier. Usually, it has a quantitative element, like a scorecard (x/100, %, fixed score, etc) and it is helpful during periodic supplier evaluation meetings.
Supplier Evaluation Scorecard
A scorecard captures the areas that the business and the supplier have agreed from the beginning that are important to be measured. The scorecard would need to reflect the pragmatic picture of the supplier and would always need to be supported by facts in order to ensure objectivity, transparency, and collaboration for improvement and development.