Why evaluation of suppliers is needed ?

Ans. Having finalized the product specification and the quantity to be product, next step is to locate the likely sources of supply. An efficient purchase department normally maintains a comprehensive list of suppliers of the range of products which are of interest to the company. For traditional items, locating source of supply is no problem. The problem arises only when the new sources are to be established. In such cases the purchase enquiries are generally sent to the firms listed in trade directories for the range of product under procurement. Selection of viable sources of supply requires proper evaluation of suppliers with respect to their ability to maintain the quality of the product at the desired level. As well as their production capacity. Final consideration, for placement of order should be limited to only those firms who have the proved capacity to supply the product of required quality and quantity. The choice can then be made on economic considerations.