Majority of the companies use Vendor rating as an important tool to keep track on vendors along with vendor evaluation .
Vendor rating are done usually post delivery and enrollment where as vendor evaluation is done prior to vendors entry in the company approved vendor list
Vendor Rating is a system used by buying organizations or industry analysts to record, analyze, rank and report the performance of a supplier in terms of a range of predefined criteria, which may include such things as:
- Quality of the product or service
- Delivery performance and reliability
- Cost, price
- Capabilities
- Service
- Financial continuity of the firm
The method includes defining the criteria and the weight each criterion receives in the overall result, development of the questions and questionnaires, actually carrying out the measurements, and finally interpreting the results. If vendor ratings are carried out periodically or even ongoing, the results (per vendor) can be analyzed and compared over time.
Benefits of Vendor Rating - Clear and objective overview of performance of suppliers
- Enables better vendor management
- Incidents and escalations can be monitored earlier
- Suppliers are stimulated to improve their performance
- In the case of periodical vendor rating: analyze trends in vendor performance
If vendor rating is carried out
before the placement of an order, it is also known as
Supplier Evaluation. When undertaken
after order fulfillment, it is also referred to as
Supplier Rating.
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