Procurement Glossary
Supplier feasibility review: Systematic evaluation of supplier capabilities
November 19, 2025
A feasibility review for suppliers is a structured assessment of a supplier's technical, economic and organizational capabilities to meet specific project requirements. This analysis takes place before a contract is signed and evaluates critical factors such as production capacities, quality standards and delivery capability. Find out below what a supplier feasibility review involves, which methods are used and how you can minimize risks.
Key Facts
- Systematic pre-assessment of supplier capabilities before the start of the project
- Includes technical, economic and organizational feasibility check
- Reduces project risks through early identification of weak points
- Standardized evaluation criteria enable objective supplier comparisons
- An integral part of strategic supplier management
Contents
Definition: Feasibility Review Supplier
A feasibility review supplier refers to the systematic analysis and evaluation of the feasibility of a collaboration with a potential or existing supplier for a specific project or product.
Core elements of the feasibility check
The assessment covers several critical dimensions of supplier capabilities:
- Technical expertise and production capacities
- Quality management systems and certifications
- Financial stability and profitability
- Supply chain resilience and logistics capabilities
- Innovation potential and development resources
Feasibility review vs. supplier evaluation
While a general supplier evaluation examines basic suitability, the feasibility review focuses on project-specific feasibility. It takes into account specific requirements, schedules and risk factors of the planned project.
Importance in strategic Procurement
The feasibility review supplier forms the basis for well-founded make-or-buy decisions and supports risk minimization in complex procurement projects. It enables an objective assessment of the probability of success before the project begins.
Methods and procedures
The implementation of a feasibility review supplier is structured and based on proven evaluation methods and standardized processes.
Structured evaluation matrix
A weighted evaluation matrix systematically records all relevant criteria. Technical capabilities, quality standards, capacities and key financial figures are weighted and evaluated according to their relevance to the project.
- Technical feasibility analysis (30-40% weighting)
- Quality and process evaluation (25-30% weighting)
- Capacity and schedule analysis (20-25% weighting)
- Financial and risk analysis (15-20% weighting)
On-site audits and assessments
Physical assessments of production facilities and processes provide objective insights into actual capabilities. These include machinery assessments, quality system audits and capacity analyses. Such assessments are particularly critical for outsourcing projects.
Risk scoring and scenario analysis
Potential risk factors are identified, evaluated and run through in various scenarios. This enables the development of contingency plans and the evaluation of project robustness under various conditions.
Tacto Intelligence
Combines deep procurement knowledge with the most powerful AI agents for strong Procurement.
Important KPIs for feasibility reviews of suppliers
Measurable key figures enable the objective evaluation of review quality and project success after supplier selection.
Review process KPIs
These key figures measure the efficiency and quality of the evaluation process itself:
- Turnaround time of the feasibility review (days)
- Completeness of the evaluation criteria (%)
- Number of identified risk factors per review
- Costs of the review process per supplier
Forecast quality and hit rate
The review results are validated by comparing them with the actual supplier performance. A high correlation between the feasibility score and subsequent performance confirms the quality of the assessment. Typical target values are 85-90% accuracy.
Project impact
Long-term KPIs measure the contribution of the feasibility review to the success of the project. These include adherence to deadlines, quality indicators and cost deviations of the selected suppliers. Series start-up success rates are an important indicator of review quality.
Risks, dependencies and countermeasures
Feasibility reviews harbour specific risks that can be minimized through systematic countermeasures and continuous monitoring.
Valuation bias and subjectivity
Incomplete or subjective evaluations can lead to wrong decisions. Standardized evaluation criteria, multi-evaluator approaches and external validation significantly reduce these risks.
- Implementation of objective evaluation matrices
- Cross-functional evaluation teams
- External audit validation for critical projects
Time pressure and incomplete analyses
Tight project deadlines can lead to superficial reviews. Early integration of the feasibility review into project planning and prioritization of critical assessment areas are essential. Ramp-down scenarios should already be considered in the planning phase.
Dynamic market changes
Supplier capabilities and market conditions can change during the course of the project. Continuous reassessments and monitoring systems ensure that the assessments are up to date and enable timely adjustments to the procurement strategy.
.avif)
Practical example
An automotive manufacturer conducts a feasibility review for the procurement of a new engine component. The potential supplier is evaluated in five dimensions: technical feasibility (manufacturing process, tolerances), quality capability (certifications, process maturity), capacity (production volume, scalability), financial stability and supply chain resilience. The review uncovers critical weaknesses in quality assurance, leads to targeted improvement measures and successful project implementation.
- Structured 360° assessment of all relevant skills
- Early identification and elimination of weak points
- Risk minimization through sound supplier selection
Current developments and effects
Digitalization and changing market requirements are shaping the further development of feasibility review processes in supplier management.
AI-supported evaluation procedures
Artificial intelligence is revolutionizing supplier evaluation through automated data analysis and pattern recognition. Machine learning algorithms analyze large amounts of data from various sources and identify risk indicators that would be difficult to detect manually.
- Automated financial analysis and credit check
- Predictive analytics for delivery risks
- Real-time monitoring of supplier performance
Sustainability integration
ESG criteria (environmental, social, governance) are increasingly being integrated into feasibility reviews. Suppliers must not only meet technical and economic requirements, but also adhere to sustainability standards and compliance requirements.
Digital collaboration platforms
Cloud-based platforms enable the efficient execution of virtual assessments and the continuous monitoring of supplier capabilities. This accelerates ramp-up processes and improves transparency in supplier evaluation.
Conclusion
A systematic supplier feasibility review is essential for successful procurement projects and strategic supplier management. The structured evaluation minimizes project risks, improves supplier selection and creates the basis for long-term partnerships. Modern AI-supported evaluation procedures and digital platforms significantly increase the efficiency and objectivity of the process.
FAQ
What is the difference between a feasibility review and a standard supplier assessment?
A feasibility review focuses on project-specific feasibility and evaluates specific requirements, schedules and risks. Standard evaluations, on the other hand, check the general suitability of suppliers without any specific project reference.
When should a feasibility review be carried out?
Ideally, the review should take place before the contract is signed and the project starts, as soon as the requirements have been defined. For critical projects or new suppliers, it is particularly important to allow sufficient time for a thorough evaluation.
What are the costs of a feasibility review?
The costs vary depending on the scope of the project and the depth of evaluation. Typically, they amount to 0.5-2% of the planned procurement costs, but are quickly amortized through risk reduction and improved supplier performance.
How is the objectivity of the review ensured?
Standardized evaluation criteria, cross-functional teams and external validation minimize subjectivity. Documented processes and comprehensible scoring methods ensure transparency and comparability of results.
.png)
.png)
.png)
