SUPPLIER EVALUATION INSTRUCTION
SUPPLIER EVALUATION INSTRUCTION
1. PURPOSE
This instruction defines the evaluation process of suppliers providing products and services based on their quality management systems and sustainability criteria. Our aim is to monitor and improve the environmental, social, and ethical performance of our suppliers, thereby establishing a responsible supply chain and supporting sustainable business practices.
2. SCOPE
This covers all materials and services affecting product quality and all suppliers from whom purchases are made. The selection of new suppliers and performance evaluation of existing suppliers are conducted according to this procedure.
3. RESPONSIBILITIES
The Purchasing Department, Administrative Affairs Supervisor, and Management Systems Manager are responsible for implementing this instruction, while the Management Systems Manager is authorized to revise it.
4. SUPPLIER EVALUATION CRITERIA
Suppliers are evaluated according to the following sustainability criteria.
4.1 Environmental Criteria
- Energy Use and Emissions: Measures taken by the supplier to reduce energy consumption and carbon emissions.
- Waste Management: Policies on waste reduction, recycling practices, and hazardous waste management.
- Water Use: Measures for water conservation and protection of water resources.
- Environmentally Friendly Products: Capacity to offer recyclable, reusable, or biodegradable products.
4.2 Social Criteria
- Human Rights and Labor Rights: Working conditions, respect for labor rights, prevention of child labor, and prohibition of forced labor.
- Diversity and Inclusion: Representation of diverse groups in the workforce such as gender, ethnicity, disability, and creating an inclusive work environment.
- Employee Health and Safety: Compliance with occupational health and safety (OHS) standards and measures taken to ensure employee safety.
- Social Contribution: Contributions to local communities, participation in social responsibility projects, and initiatives supporting social development.
4.3 Economic Criteria
- Working with Local Suppliers: Commitment to supporting local suppliers and strengthening the local economy.
- Fair Trade Practices: Supplier’s financial stability, sustainable business practices, and long-term economic development goals.
- Long-Term Economic Sustainability: Supplier’s financial stability, sustainable business practices, and long-term economic development objectives.
4.4 Ethical Values
- Anti-Corruption: Supplier’s anti-corruption policies and commitment to ethical business practices.
- Transparency and Accountability: Supplier’s commitment to transparency and accountability principles in business processes.
- Compliance and Legal Regulations: Supplier’s capacity to comply with national and international regulations.
4.5 Quality and Service
- Product / Service Quality: Evaluation of the quality of products or services offered, their ability to meet customer expectations, and the capacity to maintain consistent quality.
- Order Fulfillment Speed: Supplier’s ability to fulfill orders accurately and on time.
- Payment Terms: Assessment of the flexibility and competitiveness of payment terms offered by the supplier.
- Price: Evaluation of whether the pricing of products or services is fair, competitive, and aligned with quality.
- Quality Certificates: Evaluation of the validity and scope of the supplier’s quality and sustainability certifications.
5. EVALUATION PROCESS
5.1. Supplier Information Collection
- Surveys and Forms: Suppliers will complete sustainability surveys based on the above criteria. These surveys request information on environmental performance, social responsibility, and ethical practices.
- Document Review: Suppliers will be asked to provide sustainability reports, certificates (such as ISO 14001, SA8000, ISO 45001, ISO 14001), and other relevant documents.
5.2. On-Site Audits and Visits
- On-site audits may be conducted for critical or high-risk suppliers. These audits aim to verify the accuracy of the information provided by the supplier and to observe sustainability practices firsthand.
5.3. Scoring and Evaluation
- Supplier performance will be scored according to the defined criteria, with specific weightings assigned to each criterion.
- Scores may be categorized as follows:
- High Performance: The supplier fully complies with sustainability goals.
- Good Performance: The supplier demonstrates good performance.
- Moderate Performance: The supplier demonstrates acceptable performance.
- Poor Performance: The supplier is given a specific period to improve performance.
- Very Poor Performance: Suppliers in this category exhibit critical weaknesses, and cooperation should be seriously reviewed.
5.4. Feedback and Improvement Plans
- Evaluation results are communicated to suppliers. Improvement plans are developed for suppliers showing low performance.
- Suppliers must implement necessary improvements within a specified period to address identified deficiencies.
5.5. Monitoring and Re-Evaluation
- After the implementation of improvement plans, suppliers will be re-evaluated.
- Supplier performance evaluations will be conducted regularly, and suppliers will be continuously monitored.
6.1. Supplier Evaluation Survey Table
| Criteria | Sub-Criteria | Description | Scoring (1-5) | Weight % | Weighted Score |
|---|---|---|---|---|---|
| Environmental Sustainability | Energy Use and Emissions | Supplier’s energy efficiency practices and efforts to reduce carbon emissions | 1-5 | 7% | |
| Waste Management | Waste reduction, recycling, and hazardous waste management practices | 1-5 | 6% | ||
| Water Use | Measures for water resource conservation and water savings | 1-5 | 5% | ||
| Environmentally Friendly Products | Capacity to offer recyclable, biodegradable, or environmentally friendly products | 1-5 | 4% | ||
| Social Sustainability | Human Rights and Labor Rights | Working conditions, respect for labor rights, prohibition of child labor and forced labor | 1-5 | 6% | |
| Diversity and Inclusion | Representation of diverse groups such as gender, ethnicity, disability, and inclusive work environment | 1-5 | 5% | ||
| Employee Health and Safety (OHS) | Compliance with occupational health and safety standards and measures to ensure employee safety | 1-5 | 6% | ||
| Social Contribution | Participation in social responsibility projects benefiting local communities | 1-5 | 3% | ||
| Economic Sustainability | Working with Local Suppliers | Commitment to supporting local suppliers and strengthening the local economy | 1-5 | 3% | |
| Fair Trade Practices | Adherence to fair trade standards and commitment to transparency in trade | 1-5 | 3% | ||
| Ethical Practices | Long-Term Economic Sustainability | Supplier’s financial stability, sustainable business practices, and long-term economic development goals | 1-5 | 4% | |
| Anti-Corruption | Supplier’s anti-corruption policies and commitment to ethical business conduct | 1-5 | 5% | ||
| Transparency and Accountability | Commitment to transparency and accountability principles in business processes | 1-5 | 5% | ||
| Compliance and Legal Regulations | Capacity to comply with national and international regulations | 1-5 | 5% | ||
| Quality and Service | Product/Service Quality | Quality, compliance with specifications, and durability of supplied products/services | 1-5 | 10% | |
| Order Fulfillment Speed | Ability to deliver orders on time and accurately | 1-5 | 8% | ||
| Payment Terms | Appropriateness and flexibility of payment terms offered | 1-5 | 5% | ||
| Price | Competitiveness and value alignment of offered prices | 1-5 | 7% | ||
| Quality Certificates | Validity and relevance of quality certificates (e.g., ISO 9001) and other related documents | 1-5 | 3% |
6.4. Supplier Evaluation Survey Questions and Expected Answers
| Criteria | Sub-Criteria | Question | Expected Answers |
|---|---|---|---|
| Environmental Sustainability | Energy Use and Emissions | What measures do you take to increase energy efficiency and reduce carbon emissions? | Use of renewable energy sources, energy efficiency projects, carbon footprint monitoring and reporting. |
| Waste Management | What are your waste management policies? What is your recycling rate? | Waste reduction strategies, high recycling rates, safe management of hazardous waste. | |
| Water Use | What practices do you implement to save water? | Water recovery systems, water efficiency projects, low water consumption processes. | |
| Environmentally Friendly Products | What measures do you take to ensure your products are recyclable or environmentally friendly? | Use of recyclable materials, biodegradable packaging, environmentally friendly production methods. | |
| Social Sustainability | Human Rights and Labor Rights | How do you ensure respect for labor and human rights? | Fair working conditions, prevention of child labor, prohibition of forced labor, labor rights training. |
| Diversity and Inclusion | How do you promote diversity and inclusion in your workforce? | Diversity policies, inclusive hiring practices, suitable work environment for disabled employees. | |
| Employee Health and Safety (OHS) | How do you comply with occupational health and safety standards? | OHS training, regular safety audits, measures to reduce workplace accidents, ISO 45001 certification. | |
| Social Contribution | What social responsibility projects do you participate in to contribute to local communities? | Creating local employment, education programs, environmental or social responsibility projects. | |
| Economic Sustainability | Working with Local Suppliers | What steps do you take to support local suppliers? | Procurement from local suppliers, commitments to support the local economy. |
| Fair Trade Practices | How do you comply with fair trade standards? | Fair trade certifications, transparent trade practices, payment systems respecting labor rights. | |
| Ethical Practices | Long-Term Economic Sustainability | How do you ensure your company’s long-term economic sustainability? | Financial stability, sustainable business practices, long-term investment plans. |
| Anti-Corruption | What policies do you implement against corruption and for ethical business conduct? | Anti-corruption policies, employee training, transparent reporting systems. | |
| Transparency and Accountability | How do you ensure transparency and accountability in your business processes? | Transparent supply chain, auditability, third-party audit reports. | |
| Ethical Practices | Compliance and Legal Regulations | How do you ensure compliance with national and international regulations? | Compliance certificates, regular audits, legislation monitoring and updates. |
| Quality and Service | Product/Service Quality | How do you ensure the quality of your products/services? | Quality control processes, customer satisfaction surveys, quality management systems (e.g., ISO 9001). |
| Order Fulfillment Speed | What steps do you take to fulfill orders on time and completely? | On-time delivery rates, inventory management, supply chain planning. | |
| Payment Terms | What payment terms do you offer your customers? | Flexible payment plans, early payment discounts, financial flexibility. | |
| Price | How do you determine your pricing policies? | Competitive pricing, quality-price balance, total cost of ownership analysis. | |
| Quality Certificates | What quality certificates do you possess? | Quality and sustainability certificates such as ISO 9001, ISO 14001, SA8000. |
6.5. Scoring Guide
| Score | Description | Detailed Criteria |
|---|---|---|
| 1 | Very Poor Performance |
The supplier has made no efforts or performs very inadequately in the relevant criterion. • No policies or measures exist in the relevant area. • No certificates, documents, or concrete practices available. • Serious deficiencies in transparency and auditability. |
| 2 | Poor Performance |
The supplier has made some efforts but is largely insufficient. • Limited or temporary solutions applied, but they are not sufficient. • Insufficient or missing certificates and documents. • Policy exists but implementation is insufficient and results are unsatisfactory. |
| 3 | Moderate Performance |
The supplier has shown acceptable performance but improvement is needed. • Basic policies and measures exist but there are areas open for improvement. • Relevant certificates and documents exist but there may be implementation gaps. • Practices are regular but sometimes have deficiencies or inconsistencies. |
| 4 | Good Performance |
The supplier has demonstrated strong performance and met most requirements. • Comprehensive policies, certificates, and practices are in place. • Regular audits and continuous improvement efforts are conducted. • Results are generally positive and performance is consistent. |
| 5 | Excellent Performance |
The supplier has exceeded all expectations and shown excellent performance. • Innovative and pioneering practices with continuous improvement and excellence as goals. • Possesses all necessary certificates and serves as an exemplary model. • High levels of transparency, auditability, and continuous reporting are maintained. |
6.6. Performance Category and Collaboration Strategy
| Score Range | Performance Category | Collaboration Strategy | Actions |
|---|---|---|---|
| 1 – 20 | Very Poor Performance |
Review and Warning: Cooperation must be seriously reviewed and necessary warnings issued. |
• Notify in writing that performance level is unacceptable. • Specify improvement demands with a clear timeline. • Consider shifting to alternative suppliers. • Terminate contract if no improvement occurs. |
| 21 – 40 | Poor Performance |
Conditional Cooperation: Supplier is given a specific period to improve performance with monitoring and support provided. |
• Notify need for performance improvement and set a deadline. • Provide necessary support for improvement. • Monitor progress with regular meetings. • Consider alternative suppliers if no improvement. |
| 41 – 60 | Moderate Performance |
Development and Cooperation: Acceptable performance but improvement is needed. Cooperation should continue with a development focus. |
• Prepare and implement a development plan. • Hold regular feedback meetings. • Set performance goals and offer incentives. • Strengthen collaboration with improving suppliers. |
| 61 – 80 | Good Performance |
Strengthening and Strategic Partnership: Collaboration with strong-performing suppliers should be reinforced. |
• Establish stronger and long-term partnerships. • Provide additional support or increase business volume. • Initiate joint projects. • Honor suppliers with performance awards. |
| 81 – 100 | Excellent Performance |
Strategic Partnership and Deepening Cooperation: Strategic partnerships should be established and deepened with excellent-performing suppliers. |
• Form long-term strategic partnership agreements. • Collaborate on innovation projects. • Reward and promote excellent performance. • Hold regular strategic meetings. |
7. SUPPLIER RELATIONSHIPS AND CONTRACTS
- Sustainability terms and requirements have been included in supplier contracts. Compliance with these terms is mandatory for suppliers.
- Contracts include sanctions based on sustainability performance.
- Collaboration with suppliers is conducted in the field of sustainability, and necessary training is provided.
- Technical support and guidance are offered to suppliers to help improve their sustainability performance.
8. CONTINUOUS IMPROVEMENT
- This instruction will be regularly reviewed and updated in accordance with changes in sustainability standards.
- Continuous improvement efforts will be undertaken to enhance the sustainability of the supply chain.
9. REPORTING
- Sustainability supplier evaluation results will be included in the company’s sustainability reports.
- Supplier performances will be regularly reported to internal and external stakeholders.