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Supplier Satisfaction Survey - Questionnaire, Computation and Action

Updated on August 31, 2016
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Suppliers are usually rated, based on their performance, by the buyer organization, however, a good buyer organization allows its Suppliers to rate them too. This is basically done to have an effective feedback on the performance of the buyer Organization towards its Supplier. A good supplier base ensures that the end Customer’s requirements are met quantitatively and qualitatively. There are four aspects to Supplier Satisfaction Survey and they are:

  1. Supplier Satisfaction Survey Questionnaire
  2. Computing Survey Rating
  3. Communicating the Survey Rating
  4. Taking actions based on the Survey

We will be discussing point 1 in brief while points 2, 3 and 4 in detail.

Step 1: Supplier Satisfaction Survey Questionnaire or Vendor Satisfaction Survey Questionnaire

There are various parameters that an organization may want itself to be rated on and those need to be brainstormed and finalized first. The questionnaire, thereafter, will have questions to gauge the performance of the buyer organization under the identified parameters. Few important parameters are:

  • Collaboration (as perceived by Supplier)
  • Responsiveness (as experienced and perceived by Supplier)
  • Timely Payment (as experienced by Supplier)

Once the parameters are identified, questions need to be framed under each of the parameters. It is better to keep the number of questions between 30 and 50, so that it neither becomes too short or too long for the supplier answering. Consider a sample question under each of the mentioned parameters:

  • Management Team (of the buying Organization) is involved in Supplier Engagement Forums - Collaboration
  • In case of operational concerns, Vendor Team (within the buyer organization) is able to direct to the correct person for issue resolution, within fifteen minutes – Responsiveness
  • Payments are received on or before the end of credit period - Timely Payment

Now we decide the format in which the questions would be answered. It is better to have a five point scale on which the rating is done than a ‘yes’ or ‘no’, kind of answer. Example:

 
 
 
 
 
Strongly Agree (5)
Agree (4)
Neutral (3)
Disagree (2)
Strongly Disagree (1)

Strongly Agree is given a score of 5 while Strongly Disagree is given a score of 1.

Once the questionnaire is ready, the survey can be conducted either through a written form or by enabling it through internet, so that suppliers can log in and take the survey.

On completion of the survey we move to compute the survey rating.

Step 2: Computing Survey Rating

Let’s assume that we have 22 questions under collaboration, 8 questions under responsiveness and 2 questions under timely payment, then the maximum, minimum and neutral score is as shown in Table 1:

 
 
 
 
 
Particulars
Number of Questions
Maximum possible score (if all the questions are rated 5)
Minimum possible (if all the questions are rated 1)
Neutral score (if all questions are rated 3)
Collaboration
22
110
22
66
Responsiveness
8
40
8
24
Timely Payment
2
10
2
6
Table 1

Individual Supplier Satisfaction Score

Let’s assume that the total score under collaboration, responsiveness and timely payment is 86, 29 and 10 respectively for a particular supplier, then the rating is computed as shown in Table 2:

Particulars
Total Score
Total Questions
Average Rating
Weightage
Rating
[A]
[B]
[C]
[D] = [B]/[C]
[E]
[F]= (D1*E1+D2*E2+D3*E3)/(E1+E2+E3)
Collaboration
86
22
3.91
34
 
Responsiveness
29
8
3.63
33
4.18
Timely Payment
10
2
5
33
 
Table 2: Individual Supplier Satisfaction Score

The rating is a weighted average of the three parameters. The weightage can be decided by the organization depending on the precedence they would want to give a particular parameter. Currently, for the computation the weightage are kept the same. This score is the individual supplier’s score of the buyer organization and it can be used to communicate the rating to the supplier. However, the more important task is for the organization to understand, note down and tackle the concerns of the supplier.

Total Supplier Satisfaction Score

In addition, when all the suppliers have taken the survey the average rating can be computed. As an example, if five suppliers have taken the survey then the average rating for each parameter and final weighted average rating can be computed as shown in Table 3.

 
 
 
 
 
Supplier Id
 
 
 
Final Rating
 
Collaboration
Responsiveness
Timely Payment
 
Supplier 1
3.91
3.63
5
4.18
Supplier 2
3
4
4
3.66
Supplier 3
4
4
4
4
Supplier 4
5
5
5
5
Supplier 5
1
1
1
1
Total Supplier Satisfaction Rating
3.382
3.526
3.8
3.568
Table 3: Overall Supplier Satisfaction Survey Score

Step 3: Communicating the Survey Rating

As explained earlier, Table 2 is the Individual Supplier Satisfaction Score which is shared with the supplier. Although the supplier responds to the questions, he, or she is unaware of the parameters on which the satisfaction is measured. The organization can decide, if it wishes to share the overall rating alone or scores of individual parameter too.

In case of suppliers who have rated the buying organization in the neutral zone or lesser, it would be better to have a discussion with such suppliers. Such discussions will give the buying organization an insight into its dealing with a particular supplier or its mode of operation with all suppliers.

Step 4: Taking Actions based on the Survey

Actions on the survey can be taken at two levels – at an Individual Supplier feedback level (based on Table 2) and the overall supplier feedback level (based on Table 3). A score of 3.5 or lesser is considered as an area of concern. Score of 3 falling in the neutral zone indicates that the supplier is not opening up or does not intend to rate the buyer organization lesser than 3. The reasons could be many but one of the prominent one is where the supplier perceives it as a risk to appear unsatisfied, which may lead to unwanted repercussions from the buyer organization. This concern needs to be tackled too.

In our example of an individual supplier’s feedback shown in Table 2, all scores are above 3.5 and hence we can safely assume that the supplier is fairly satisfied with the association. However, Table 3 reveals that on collaboration, the organization score only 3.382 taking all the suppliers into consideration. This means that the buyer organization is not seen as supporting most of the suppliers and hence they need to act in this area.

One way of taking action is to have a Focused Group Discussion of aggrieved suppliers and try to find the specific problem. Once the problem is identified then the exact action can be finalized, shared with the suppliers and implemented on ground. When real actions take place on ground, the confidence of the suppliers go up and they would be more open to work with the buyer organization.

Supplier Satisfaction Survey is a great tool when an Organization takes it seriously gets feedback and acts on it. Such an initiative paves the way for a better and effective supplier base, which would be ready to cooperate and work towards the success of the buyer organization.

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    • Savio Dawson profile image
      Author

      Savio Koman 2 years ago from Mumbai, India

      Hello Brian Park,

      If you are reading this, I just wanted to thank you for pointing out one of the typos in my table. I have rectified it and now it should be reading right.

      Thanks! Savio.

    • profile image

      semmalsony@gmail.com 2 years ago

      Hello

      This is thirusemmal from india. The survey quest. is very useful thank you very much.

    • profile image

      semmalsony@gmail.com 2 years ago

      Hello

      This is thirusemmal from india. The survey quest. is very useful thank you very much.

    • Savio Dawson profile image
      Author

      Savio Koman 2 years ago from Mumbai, India

      Hello Semmalsony,

      Glad you found the survey questionnaire useful. Regards, Savio.

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