A graphical instrument for performance analysis of contractors

The relationship between the manufacturer and supplier has changed from one of competition into that of greater cooperation during recent years. The selection and evaluation of suppliers are primary and important issues when an enterprise implements Supplier Relationship Management (SRM) and Total Quality Management (TQM). Much research indicates that most enterprises tend to evaluate their suppliers based largely on quality, delivery, and price performance. However, an analysis tool which can simultaneously integrate numerical decision criteria is rare, especially those suitable for evaluating various operational aspects, such as industry categories, purchase types, or production strategies. Based on this reason, an integrated model using multiple performance indices to construct a supplier performance evaluation chart (SPEC) is presented in this study. It is a graphic portrayal that can simultaneously display each supplier’s performance of quality, delivery, and price through the use of a categorical symbol and its location on the SPEC. Based on the expected levels for each evaluation criteria, the manager can mark a target region on the SPEC so that an existing or new supplier’s ability to achieve the preset level is effectively and conveniently indicated. Finally, an illustration is provided as a practical application.