For several decades now, I have used Ray Carter's 10 C's excellent 10 C's rubric for evaluating suppliers and sourcing product strategically. There are many results via online search and you can also visit Ray's site for more. I have found great utility via using the 10 C's not only as a clear and concise set of metrics for supplier evaluation, but also as a great, lucid tool to explain my analysis to partners and clients. Soon, I intend to blog about how I use Decision Matrices to rank suppliers via the 10 C's (and any other criteria as agreed upon by me and my partner or client). The 10 C's are not perfect and, like most things in life and business, have some overlap conceptually; I do not see the overlap and mix of quantitative and qualitative metrics as any sort of deal killer, however. The 10 C's remain relevant and very useful.
What follows is a de rigueur list of the 10 C's with some thoughts and analysis:
Carter’s 10 C’s for Strategic Product Sourcing/ Supplier Assessment --
Competence - indicates the vendor's ability -- or Capability - to fulfill orders or adhere to Supplier Contract stipulations. This metric can be qualitative or quantitative or both. It can encompass production, product mix, delivery and logistics, design and other issues.
Capacity is self-explanatory. I suggest asking for specific quantitative measures of capacity pursuant to EAU and other concerns. With numerical capacity information from multiple vendors, clients can make informed decisions.
Commitment is a qualitative measure of vendor dedication to values that you or your customer may hold dear. These include quality, length and depth of relationships over time and customer service.
Control Systems both internally at the supplier and in terms of the supplier-buyer relationship are vital. Risk exposure, resource management (human, capital, cash, inventory) and related monitoring should be taken into consideration. IT systems that truly mirror or mesh with best practices can assist.
Cash can be an indicator of financial resilience. If the supplier is listed or can share audited financial data, consider using ratios such as current and quick ratios and rank suppliers accordingly.
Consistency - quality (control and assurance) and service levels should be measurable and improve over time. Ask for reference letters from other customers and rank suppliers by the volume and strength of said references. Consideration should be given to mapping out and working together on quality improvement over time via remote and face-to-face "summits" and initiatives.
Cost is also self-explanatory. It is important for end customers to understand to what extent cost places a role in their strategic sourcing decision-making. Determine how cost and quality should be optimized.
Compatibility elucidates whether or not the end customer or buyer and supplier sync or click culturally and stylistically. It encompasses values, ethics, management style, personnel policies and use of technologies.
Compliance is an indication of the extent to which suppliers meet legal and regulatory requirements in their jurisdictions including those related to labor and the environment, to name a few. It can also measure the supplier's ability and willingness to meet the compliance needs of end customers in their home or customer jurisdictions. In many parts of the developed world, there can be a large gap between what law and regulation require and what is actually followed or enforced. Note that this gap -- if it disappears -- can lead to immense supply chain disruptions for end customers.
Communication measures the ability of suppliers to not only literally and figuratively speak your language, but also their willingness and alacrity to use communication technologies in the customer's favor (i.e., using Skype or Google Hangouts instead of forcing the customer to use WeChat. Having said that, there is nothing wrong with clients being adaptive as well and exploring solutions that the supplier uses). Furthermore, Communication scores can be increased pursuant to vendor passion in terms of communicating and over-communicating the good, the bad, and the ugly.
I strongly suggest using the 10 C's as a quick, easy and surprisingly in-depth way of sourcing product and evaluating vendors. Coupling the 10 C's with weighted Decision Matrices is a match made in Heaven in terms of analytical rigor and ease of which to explain analysis to partners and customers. The 10 C's are not a panacea and are not perfect; but overlaps and slight mixing of concepts and qualitative and quantitative measures can be easily overcome with a team approach to analyzing the 10 C's for each and every supplier.