Evaluating suppliers can be educational for the supplier. When suppliers are asked to comply with customer requirements that are considered industry best practices, they may have the opportunity to learn more about those practices. You may wonder how a company can end up with suppliers who are unaware of best practices that are customer requirements. For one simple reason: the customer has never clearly communicated its performance expectations to suppliers before. Another reason is that industry best practices are rarely universally agreed-upon, so no two companies are likely to interpret and deploy them in exactly the same way.

In the process of gathering information about supplier performance, customer firms may end up educating suppliers about important topics such as lean enterprise, sustainability, and corporate social responsibility. Since this educational component is always a possibility, it is particularly important to make sure that questionnaires and surveys are free of buzzwords. If the buzzwords are unavoidable, then it’s important to provide clear definitions of them right in the assessment itself. For example, in a lean assessment that I helped author, we made sure that as much as possible we were not using lean buzzwords. Some suppliers could be deploying components of lean but not in using the exact same tools or methods as their customers. Suppliers should not be dinged for not knowing what an AIW (Accelerated Improvement Week) or HPW (High Performance Workplace) is, terms and techniques that may have been adopted by more well-heeled corporate customers. However, in breaking down these practices into their simpler components, suppliers may learn about specific tools and practices about which they were previously unaware. Or suppliers may discover that they were actually deploying some components of these practices but that there were other aspects not being deployed that would be valuable to adopt.

Another example is Walmart’s Sustainability Index (see pdf of Walmart’s 15 questions on this page). Suppliers are asked about greenhouse gases (GHG) emissions and the Carbon Disclosure Project (CDP), a non-profit registry of company carbon footprints and sustainability efforts. Many Walmart suppliers are likely to become aware of these sustainability metrics only through this assessment process. Awareness is the first step toward adoption.

The educational aspect of supplier assessment can be an important by-product – giving suppliers valuable improvement ideas, raising performance standards, improving communication between customers and suppliers, and strengthening the relationship.