Evaluation criteria is the standard used to evaluate bidders’ technical and operational effectiveness based on their offers; or it is the standard on which a technically sound judgment or decision on selection of various alternatives can be based. The previous article emphasised that this criteria must be based on objective measures that are quantitative to facilitate a process that is not subjective. The test of a good evaluation criterion is that different adjudicators come out with a decision with a small margin of difference. It becomes easy to compare apples with apples and oranges with oranges.
Since organisations set standards for supply of inputs as a way of ensuring compliance with key production variables of time, quality, quantity and cost, the development of evaluation criteria must take into account the business case.
Organisational goals; the strategic, commercial and operational goals of the organisation must be the minimum standard for evaluation criteria. Every organisation has a business plan or strategy combining marketing, operations, logistics, production and financial management. The overall strategy is the one that shapes support activities objectives that include procurement of inputs to support operational activities.
The procurement unit must ensure that quality issues are achieved when making sourcing decisions. Quality or the assurance of sustained quality of inputs and outputs is achieved by specifying apart from standards of production, standards of inputs in terms of technical performance characteristics, physical or chemical composition and might include processing or production processes. Request for proposals (RFP) must communicate effectively the minimum standards that the sourcing organisation will accept. Vague statements demanding good quality from the suppliers must never be used to effectively manage quality of inputs.
Input, spare parts and equipment sourced must be dependable. This is against the influx of cheap and poor quality Chinese products on the market. There are a lot of counterfeit products on the market and buyers need to protect their organisation from the exposure of counterfeit products. Dependability is mainly measured by compliance with specifications. Counterfeit products would be specified to match the genuine product making it difficult for adjudicators to split the differences.
The buyers’ protection is derived from linking the product supplied to the manufacturer through the legal arrangement between the buyer and the agent. Some buyers of equipment demand proof of dealership or franchise to ensure that they buy products that are supported by genuine manufacturers.
In some cases, buyers’ demand that suppliers in addition to the above requirement of a formal relationship between the agent with the manufacturer, they demand quality management confirmation of the manufacturer in the form of ISO certificates. In their quest to mitigate environmental risks of inbound logistics, buyers’ are demanding proof that the manufacturer is green conscious. Suppliers are requested to provide carbon footprint, ISO 14000 certification and carbon emersion reports from the manufacturer to ensure that inputs are dependable. Organisational goals have set timelines that are used to ascertain the performance of the organisation. Such timelines are reflected in the maximum time allowed by the buyer to deliver the product or service required. The timelines can further extend to after-sales service in the purchase of equipment. Suppliers are therefore required to state delivery period and the nature of after-sales services offered. Suppliers’ might be required to demonstrate their flexibility to cope with irregular or regular changes in specifications or designs, variations in order quantities, or variation in time of delivery or variation in both time and order quantities. All this is demanded to ensure organisation goals are meet without too much headaches. Suppliers are also evaluated against cost. Costs are assessed in relation to the market and the buyers’ budget. Buyers are interested in competitive prices when comparing with similar suppliers in relation to the total cost of ownership. RFPs must be crafted to ensure that organisational goals are met.
lNyasha Chizu is a fellow of CIPS and the branch chairman for CIPS Zimbabwe writing in his personal capacity. Email: [email protected]
