Tag: rating

BLK evaluates all users on the basis of our proprietary Quality – Cost – Service Delivery criteria.

But what does quality mean for us and how do you as a supplier or buyer can ensure to be recognised among the top quality players?

In this post we will look at how BLK assesses quality.

Quality is a mix of many factors, which we assess individually and score on a scale from 1 to 100. Each factor carries a different weight, all of them contributing towards your overall Quality Score.

1. Quality Certifications
2. Class Approvals
3. Legal Status
4. Supply Chain Security
5. Financials
6. No. of employees
7. Country of HQ
8. Turnover
9. Years in Business
10. Track Record of Customers
11. Returns Policy
12. Transparency
13. Carbon Footprint

Each and every variable is assigned a different weight. 

1.1 Quality Certifications 

We check that the company operates a Health and Safety Management System to a recognised standard. Moreover, we ensure it holds a number of certifications validated by various independent certification bodies.

We also look at whether the company has an adequate Environmental Policy in place, alongside formal risk assessment procedures and dedicated HSE personnel to implement them.

Finally, we check the company Employer’s Liability insurance, as well as policies and provisions for the training of personnel.

1.2 Class Approvals

We check that the company has been independently audited and holds certifications with classification societies such as Det Norske Veritas (DNV), Lloyd’s, UKAS, and whether the class approvals cover the scope of supply of the company.

Furthermore, we look at whether the company manufactured products are independently analysed by renowned players like Société Générale de Surveillance (SGS ) so as to ensure quality and compliance with all applicable standards.

1.3 Legal Status

This is a very important check that we run. We assess the company background and ensure that neither the company, nor any of its directors have had any conviction under environmental, health and safety legislation during the past three calendar years.

Additionally, we want to make sure that none of the directors of the company has ever been convicted for a breach of the Bribery Act 2010 or similar legislation.

1.4 Supply Chain Security

Supply chain security is critical. Merger and acquisitions, change in key personnel, joint ventures and similar events may expose a company’s supply chain to external attacks like cyber and/or noncompliant suppliers.

BLK Assesses businesses’ supply chains to determine whether this is sufficiently secure to meet international standards.

In particular, we look at historical and prospective acquisitions, change in key personnel and onboarding of suppliers with a history of bribery, criminal convictions and/or cyber attacks.

We also evaluate the key personnel’s retention rate, ensuring that a business has competent, stable and secure people on the job.

This way we can be sure to offset the risk of external stakeholders, procedures and processes exposing the company’s supply chain to external attacks.

1.5 Financials

We analyse company financials to ensure these are solid enough to guarantee the continued operation of the business for the foreseeable future.

Among other things, we look at the company’s debt ratio to assess the long term stability of the business.

Furthermore, we look at the transparency of the company in its willingness to disclose its entire financial history, financial projections and order book for the years ahead.

In assessing the financials, we also ensure that these are independently audited.

1.6 Number of Employees

Although not always an indicator of quality (most of the big corporates are notoriously inefficient) a large number of employees underpins a general stability within a company. We take this into account with a weight factor. There are buyers who may wish to only do business with companies which they perceive as stable or “safe”.

Alongside their balance sheet, the overall staff number is a good indicator of a business’ medium-term stability.

1.7 Country of HQ

Our assessment looks, among other things, at the company’s country of HQ. This impacts the overall score based on the country’s rating from the major credit rating agencies.

We also look at the company’s approach to health, safety, quality and management compared to that of similar companies in the country.

1.8 Turnover

For some (generally corporate) buyers, public entities or ISO 9001 certified businesses it may be required to only consider as suppliers companies above a certain turnover thresholds. This is especially the case in public sector procurement and it’s not uncommon for public tenders in the UK to require a minimum of £500,000 annual turnover in order to qualify for the bid.

BLK assesses the turnover independently and gives visibility of it to our buyers, so that they can select the most appropriate suppliers on the basis of their internal policies.

1.9 Years in Business & Key Personnel Retention

Although not a key indicator, a long track record supports the perception of long-term stability of a company. This evaluated and feeds into our overall quality assessment with a weighted score, so as not to penalise excessively start-ups and younger businesses, whilst allowing buyers to get full transparency on suppliers they intend to do business with.

Company evaluations we run focus, among other things, to the company history, not just in terms of number of years in business, but also in terms of long term growth of their bottom line as well as headcount and key personnel retention rate. 

This way, we can ensure stability going forward and competence of the team in critical positions and departments which will affect our customers, such as production and customer service.

1.10 Track Record of Customers

Another thing we evaluate is the company’s existing customer pool, its size, distribution and quality.

We look at whether a company works with blue chip brands or publicly-listed entities, which is a strong indicator of the quality of their products/services as well as service delivery.

1.11 Returns Policy

Return policy says a lot about the quality of a business. Especially within the commodity space, if  a company has a return policy in place it means they’re confident about the quality of what they sell, and it’s a huge bonus in the overall assessment.

In assessing businesses, we look at whether a company offers 100% money-back guarantee if goods are not as described or according to specification.

Also, we look at whether the company has a dedicated, permanent customer service team, which impacts positively on the company’s overall quality and service delivery.

1.12 Transparency

Transparency is paramount. It is the very reason why we assess businesses the way we do.

Transparency is the foundation of our business and that of our partners. We therefore request a large amount of documentation from the businesses we vet and we look at whether businesses adopted a transparent approach from the onset, disclosing financials, performance indicators and remaining open to an on-site visit from one of our representatives.

If they don’t… maybe they have something to hide. That brings their rating down.

1.13 Carbon footprint

As we go forward, more and more focus is placed on the environmental impact of companies and people we do business with.

This has a specific place in BLK’s vetting process and we look at companies’ carbon footprint overall and specifically for the products they are selling.

We do this by gathering data on their emissions, electricity consumption, fuel consumption, business travel, lighting and heating. 

All these information are conveyed into our proprietary model for an Extended Exergy Accounting evaluation.

Exergy is and extensive property of a system and it is a measure of the system’s overall impact within the environment. Differently from Energy, exergy does not conserve itself.

Thermodynamic processes, including human activities and manufacturing, destroy a portion of the exergy. Exergy destroyed is the part of energy that can no longer be recuperated and used for any other process. It is an unservable by-product of a process.

We treat a business like a black box. We assess all the exergy getting into the business in terms of specific energy of capital, labour, environmental impact, etc. We then look at he output product and their specific exergy content.

This allows us to determine whether these products are adequately priced not only in relation to the market but also in terms of environmental cost required to produce them.

All this goes into our Extended Exergy Analysis and with this method we are able to evaluate a company’s true footprint on the environment.

Do you want to find out the overall quality rating of your business?

Do you want to understand how you stack-up against your competitors in the market and take the necessary steps to improve your positioning?

Find out more about the BLK Rate and contact us for a tailor-made discussion.