Supplier selection is made through price comparison in most businesses. That approach causes no problems in the first six months but recovers the cost elsewhere afterwards.
First criterion: legal documentation
That is a non-negotiable precondition.
The supplier should hold a business registration.
Where they produce food, a production licence is required; where they only distribute, a warehouse registration.
Those documents should be requested and kept on file.
Inspections ask where a product was bought.
Buying from an undocumented supplier creates liability for the business itself.
Validity dates deserve checking too.
An expired document has the same effect as none.
Annual renewal should be requested.
Second criterion: cold chain evidence
That is critical where chilled and frozen products are bought.
It should be verified that the supplier's vehicles are refrigerated.
Product temperature should be measured and recorded at delivery.
That measurement should be part of the goods-in procedure.
Vehicles that log temperature are preferable; some suppliers can provide a record for the journey.
That record clarifies responsibility when a problem arises.
Chilled product arriving above 4 degrees, or frozen product above minus 15, should be rejected.
Applied once, that markedly changes supplier behaviour.
| Criterion | How it is measured | Weight |
|---|---|---|
| Legal documents | Document check | Precondition |
| Cold chain | Delivery temperature | Precondition |
| Delivery timing | Rate of late deliveries | High |
| Product consistency | Rate of rejected batches | High |
| Price | Unit cost comparison | Moderate |
| Communication | Response time | Moderate |
| Returns policy | Written terms | Moderate |
| Payment terms | Credit period | Moderate |
| Product range | Share bought from one source | Low |
| Sustainability | Documentation and practice | Low |
Third criterion: delivery performance
That is the most overlooked criterion and the most expensive one.
A late delivery means a missing line on the menu.
A missing line means lost sales and dissatisfied customers.
Measurement is simple: the planned and actual times of every delivery get recorded.
A monthly late-delivery rate is calculated.
Below 5 percent is good; above 15 percent is a problem.
The short-delivery rate is measured separately: how many ordered lines actually arrived.
Those two rates form the basis of supplier assessment.
A supplier offering a price advantage but frequently late is in fact expensive.
Fourth criterion: product consistency
The same product should be the same at every delivery.
Fat content in deli products, weight in baked goods, size grading in vegetables.
Inconsistency distorts recipe cost and portion standards.
Sampling at every delivery provides the measurement.
Weight and a visual check suffice.
The rate of batches rejected or received below standard gets recorded.
Above 3 percent is a problem.
Where inconsistency persists the supplier should be approached; in most cases the cause lies in production or storage.
Fifth and sixth criteria: price and communication
Price comparison should be made on unit cost.
Cost per kilogram or per portion is calculated.
Trim loss belongs in the calculation; a cheap product with high waste can be expensive.
Delivery charges, minimum order values and payment terms are part of the price too.
Communication is hard to measure but an important criterion.
How many hours does a response take when a problem arises.
Are changes to an order accepted.
Is there a single point of contact, or a different person every time.
During a busy service a fast resolution is worth far more than a few lira of price advantage.
Seventh and eighth criteria: returns and payment
The returns policy should be written.
In which circumstances returns are accepted, and within what period notice is required.
The process should be clear before spoiled, short or incorrect product arrives.
Verbal agreements do not function at the moment of a problem.
Payment terms should be settled from the start.
Cash, credit or consignment.
The credit period directly affects cash flow.
Thirty days markedly reduces the working capital a business needs.
But unit prices are generally higher on credit terms.
The difference between the two options should be calculated before deciding.
Ninth and tenth criteria: range and sustainability
The product range determines how many suppliers are needed.
A supplier with a wide range allows single-source buying.
That reduces the ordering and delivery burden.
But dependence on one supplier creates risk.
At least two suppliers should exist for critical products.
Sustainability comes last but gains importance.
Packaging choices, waste management and local sourcing policies.
Some customer groups care about this and it can be used in a business's communication.
How is a scorecard built?
Those ten criteria turn into a simple scoring table.
Each criterion is scored from one to five.
Preconditions are not scored; a supplier failing them is eliminated outright.
The remaining eight criteria are weighted.
Delivery and consistency take a weight of three, price and communication two, the rest one.
The total score allows suppliers to be compared.
That table should be updated every six months.
The ranking shifts as new data goes in.
A supplier whose score falls should be approached; in most cases the problem can be corrected.
That system moves the supplier decision from instinct onto data.
How are contract and payment terms set?
Choosing a supplier does not end with the product and the price.
Contract terms are at least as decisive as price over the long run.
Payment terms come first; options of thirty, forty-five or sixty days directly affect a business's cash flow.
The second clause covers returns; how faulty or spoiled product gets returned should be in writing.
The third covers delivery frequency and the minimum order value.
A high minimum creates stock pressure for a small business.
The fourth covers how often prices get revised; frequently changing prices make menu costing unpredictable.
The fifth covers priority of supply in a crisis; who gets served first during busy periods should be agreed in advance.
Those five clauses matter more than the discount offered at the first meeting, and they are the ones most often left unwritten.
