Why we need supplier evaluation under sustainability aspect

Why we need supplier evaluation under sustainability aspect

Evaluating potential suppliers in terms of sustainability requires a comprehensive understanding of the ecological, economic, and social aspects of sustainability, as well as an understanding of the structures and mechanisms that are prevalent in the market. This can be a complex and multi-faceted process that involves assessing a variety of factors, including environmental impact, labor practices, and corporate governance. Additionally, organizations should consider the specific needs and goals of their business and align their supplier evaluation criteria therefore.

How to go about supplier evaluation?

Effective supplier assessments evaluate the overall organizational and technical performance of individual suppliers in relation to the organization's sustainability goals. This includes assessing the supplier's current performance and practices and comparing them to the desired target state, as well as identifying any potential areas for improvement. Additionally, it includes evaluating the supplier's management systems, processes, and performance metrics, track record, compliance with relevant laws and regulations and any certifications or awards they may have received for sustainable practices. Such assessments are crucial for organizations to ensure that their suppliers align with their sustainability goals and to make informed decisions about their supply chain. This includes, for example

• An assessment or evaluation of the supplier relationship,

• A weak point analysis and

• A review of the supplier portfolio, including short-term relief in the event of resource bottlenecks

Yes, it is important to determine specific criteria and conduct a systematic risk assessment when evaluating suppliers. A matrix can be useful in identifying and prioritizing risks based on the supplier's position in the supply chain. For high-risk, essential suppliers, an on-site audit may be the best course of action to mitigate potential issues.

What are the benefits of supplier evaluation?

Systematic supplier evaluation involves thoroughly assessing and evaluating potential and current suppliers in order to identify any potential risks or issues that may arise. This process can help a company ensure that they are working with reputable and reliable suppliers. Setting clear evaluation objectives, defining quality targets, and outlining obligations for external suppliers allows for fair comparison and evaluation. This process can also aid in developing and optimizing existing supplier relationships. Additionally, evaluating suppliers from a sustainability perspective can demonstrate the company's commitment to social and environmental responsibility, as well as continuous improvement in its value creation.