Vendor Rating

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Description of Vendor Rating. Explanation.

All about Vendor Rating

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Definition Vendor Rating. Description.

Vendor Rating (also called: supplier 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

Objective and Subjective Vendor Rating

Broadly 2 types of supplier rating can be distinguished:

Objective vendor rating (based on lead times, costs, number of service calls, etc.)
Subjective vendor rating (based on opinions, experiences and perceptions about suppliers)

Supplier Rating, Assessment, Evaluation and Ranking

These terms are all closely related and similar, but:

Vendor Evaluation
- Is a process carried out after the product is delivered or the service is rendered.
- Can indicate a continuous process of measurement, usually comprehensive.
Vendor Rating
- Can be used before or after order fulfillment.
- Is usually used with reference to a scale.
- Is an approach of comparing various or multiple vendors.
Vendor Assessment
- Usually indicates a one-time process.
- Typically used for one particular vendor.
Vendor Ranking is the end result of the above processes.

Special Interest Group - Vendor Rating

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Discussions about Vendor Rating.

	Disadvantages of Vendor Rating; Where it is Difficult to Use When limited sourcing (very few or only 1 supplier) is available, the use of the vendor rating is co (...)

	Vendor Rating for New, Potential Vendor I'd like to understand how should one can create a first vendor rating procedure for new suppliers ( (...)

	Vendor Rating must be Fair Vendor rating needs a system which is fair between vendors. We should ask ourself what is the priori (...)

	Gradually Evaluate Suppliers There are many suppliers in our company. When we were audited by a certification body, the auditor r (...)

	Objective Vendor Evaluation and Appraisal Whenever vendor evaluation has been done by any organization, the results should be captured in key (...)

	Vendor Rating needs Benchmark Vendor ratings are important but they are only practical if a benchmark is available. The availabili (...)

	Vendor Rating Usages Any organization who carries out any activities to meet customer requirements expects information on (...)

	Vendor Rating versus Vendor Evaluation In the summary of Vendor Rating I see that: Vendor Evaluation - Is a process carried out after th (...)

	Supplier Relationship Management Cultivate a good relationship with suppliers so that they can contribute to the improvement of quali (...)

	Tips on Supplier Evaluation Beyond the 4 purchasing categories described by , how do I go about evaluating suppliers? What are t (...)

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	Supplier Evaluation and Selection. Process and Methods Vendor Rating, Supplier Selction (...)

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