Supplier evaluation process flowchart (ongoing performance)
Supplier evaluation process flowchart for suppliers already in use: quality, delivery, cost and service KPIs, scorecard, review, improvement plan, de-listing.
How it works
Open the template and rename the lanes
Replace Procurement, Quality, Receiving and operations, Finance and Supplier with the functions you actually have. If one person covers quality and receiving, merge those lanes rather than leaving one nearly empty. Keep the Supplier lane even if the supplier never sees the chart: it marks the two steps that depend on someone outside your organisation, which is where the cycle usually stalls.
Write your KPIs and the threshold onto the chart
Use the note on "Confirm the KPIs and review period" to record the measures that already exist in the contract or service agreement, and define each one unambiguously — on-time delivery against the originally confirmed date or the revised one, in full or by line, received date or booked-in date. Then put a real threshold on "Performance meets threshold?", agreed jointly by Quality and Procurement, and state the review period it applies to.
Agree the scorecard weightings before the period starts
Decide how quality, delivery, cost and service are weighted, and publish it. Weightings settled after the data arrives look like the answer was chosen first. Keep the measure count small enough that each one can be sourced from a system rather than reconstructed by hand, and note on "Calculate the supplier scorecard" who compiles it and from which report.
Define what conditional status actually restricts
Conditional status only works if it bites. On that step, write down what it means in your organisation: no new business or new part numbers, named categories or sites only, inspection on receipt at your cost or theirs, and a fixed date at which the status is re-examined rather than quietly left to lapse.
Set the escalation authority and the exit route
Name who can approve de-listing and who has to be consulted — typically Quality and the budget holder, not the buyer alone. Check the notice provisions in the contract before the branch is used, and add a step of your own if a supplier is single-source, because de-listing without a qualified replacement moves the problem rather than solving it.
Frequently asked questions
What is the difference between supplier evaluation and supplier approval?
Approval decides whether a supplier may be used at all, and for which categories, sites or part numbers. Evaluation asks how a supplier already in use has performed over a defined period, and produces a rating with an outcome attached. They run on different clocks: approval happens once and is refreshed periodically, evaluation repeats every cycle. Keeping them separate stops an active supplier record from quietly reading as blanket approval. Use the vendor approval process template for the first question and this one for the second.
How often should suppliers be evaluated?
Set the frequency by criticality and spend rather than applying one interval to everyone: frequent formal reviews for the few suppliers who can stop production or breach a customer commitment, and a lighter annual review for the long tail. Record the interval on the approved supplier list entry so it does not depend on someone's calendar. Add event triggers as well, which is what the second branch of this chart is for, since serious failures rarely wait for the review date. ISO 9001:2015 requires monitoring and re-evaluation of external providers but sets no interval, so the cadence is yours to define and justify.
What should a supplier scorecard measure?
Four families cover most of it. Quality: defect or non-conformance rate, rejected batches, corrective action turnaround. Delivery: on-time and in-full performance and adherence to quoted lead times. Cost: price against the agreed schedule, plus the costs the supplier causes you elsewhere through rework, expediting or line stoppages. Service: responsiveness, documentation accuracy and how problems are handled. Take the measures from the contract wherever possible, keep the list short enough to be pulled from systems, and weight them so a strong price cannot mask a quality problem.
Should the supplier see the scorecard before the review meeting?
Yes, and this chart makes it a step. Sending the draft in advance gives the supplier the chance to challenge a figure or supply context you do not have, such as a delay you caused by changing a specification. The meeting can then be about causes and actions rather than about whose data is correct. It also removes the most common excuse for an improvement plan going nowhere, which is that the supplier never accepted the underlying numbers.
What happens when a supplier keeps missing improvement targets?
That is the escalation branch. After a failed re-check, "Persistent failure?" offers three documented answers: extend the plan with revised milestones where progress is real but slow, move the supplier to conditional status with restricted scope and increased inspection, or de-list and re-source the category. All three end in an update to the approved supplier list, so the record reflects what was decided. Before de-listing, check the notice terms in the contract and whether a qualified alternative exists, particularly where the supplier is single-source.