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The basic objective of any supplier assessment process is to provide an underpinning for enhancing the quality assurance aspect of the supplier-customer relationship.

One basic goal of performance assessment is to encourage a supplier to align its performance with the organizational goals and objectives of the municipality. There is considerable reason to believe performance levels improve simply because the supplier realizes performance is being measured and evaluated.

Individual supplier performance is, of course, a critical consideration because it relates to the satisfaction of the needs of an individual ordering department within the municipal organization. However, to enhance municipal operations on a consistent basis, it is generally necessary to approach supplier performance monitoring on a comparative basis.

Strategic planning is optimized when one moves from a known point of origin towards a predetermined destination. Thus, it is important to compare current results with historic performance.

In terms of public service delivery, the overall goals of performance assessment are to help ensure cost effective programs and source delivery and obtaining fair value for money. To that end, in assessing the overall performance of a municipality’s suppliers, the purchasing department might keep track of the following key areas of comparative performance with respect to all suppliers across the municipality and with respect to classes of suppliers of a given kind.

The range of factors that should be taken into account in assessing performance must be tailored to the specific requirements of the municipality as a customer. Nevertheless, there is likely to be considerable consistency concerning requirements not only across different municipalities, but also between the public and private sector.

Those private sector buyers who have implemented performance evaluation schemes generally focus on a narrow band of considerations.

These include the following:

• Reliability of delivery: Advance notice given of likelihood of back order; willingness to cancel order where goods are back ordered; portion of supply on back order; time required to complete back orders.
• Quality of delivery: Percentage of non-conforming goods (whether within agreed tolerance levels); apparent attention to quality control; use of an appropriate screening methodology to prevent shipments of substandard goods.
• Logistics: Efficiency in the processing of orders, including turnaround time to first shipment and demonstrated ability to expedite orders on request; meeting time commitments for delivery; advising in advance of any anticipated delay. Where price includes time charges for installation or similar work, time required to get workers to site and to carry out work in question (note that low hourly rates will be misleading, where the time required to carry out work is in excess of what would normally be expected).
• Warranty and related considerations: Scope of coverage offered; frequency of dispute as to whether deficient performance covered by warranty; presence of a policy of “blame shifting” (e.g., a hardware supplier stating, “the problem is with your software”).
• After sales support: Occurrence of any unexpected problems in getting goods to work as required; demonstrated ability to deal effectively with goods damaged during shipment; reliability of installation and repair work; demonstrated commitment to getting product up and running on a timely basis; and availability of after-hours staff to carry out such work.
• Benchmarking: Comparative performance in the above areas in comparison to other suppliers delivering broadly comparable goods and services.
• Research and development: Are the goods supplied at the cutting edge of emerging technology or are they near obsolescence; to what extent is the general finish of products evident (e.g., do they work “out of the box” or is a substantial break-in required).

Many critics of public purchasing would also incorporate the following additional concerns into the performance evaluation process:

• Social conscience considerations: Adherence to fair wage and fair terms of trade.
• Quality of environmental: Environmental awareness and commitment to sustainable development. Incorporation of a green technology and green sources of supply.