What is Vendor Rating? Meaning.
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:
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Quality of the product or service
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Delivery performance and reliability
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Cost, price
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Capabilities
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Service
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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
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Clear and objective overview of performance of suppliers
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Enables better vendor management
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Incidents and escalations can be monitored earlier
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Suppliers are stimulated to improve their performance
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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
- Vendor Ranking is the end result of the above processes.
Forum about Vendor Rating. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.
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Tips on Supplier Evaluation
Beyond the 4 purchasing categories described by Kraljic, how do I go about evaluating suppliers? What are the main steps and what are the pitfalls that should be avoided?...
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Objective Vendor Evaluation and Appraisal
Whenever vendor evaluation has been done by any organization, the results should be captured in key performance indicators within a specified period of time. Without this, a lot of subjectivity will ...
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Gradually Evaluate Suppliers
There are many suppliers in our company. When we were audited by a certification body, the auditor recommended to gradually evaluate suppliers. He got it as a observation finding. Therefore, how to ev...
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Vendor Rating needs Benchmark
Vendor ratings are important but they are only practical if a benchmark is available. The availability of the benchmark itself can make a marked difference in the output quality of vendors. Also of eq...
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Vendor Rating Usages
Any organization who carries out any activities to meet customer requirements expects information on his performance. Vendor rating meets this with respect to the supplier performance. Supplier improv...
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NEW Vendor Rating versus Vendor Evaluation
In the summary of Vendor Rating I see that:
Vendor Evaluation
- Is a process carried out after the product is delivered or the service is rendered.
- Can indicate a continuous process...
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Supplier Relationship Management
Cultivate a good relationship with suppliers so that they can contribute to the improvement of quality.
Supplier relationship management is important to the company's quality programs. The suppli...
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The best, top-rated topics about Vendor Rating. Here you will find the most valuable ideas and practical suggestions.
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Vendor Rating for New, Potential Vendor
I'd like to understand how should one can create a first vendor rating procedure for new suppliers (not yet present into the supplier list). It should be useful to use not only financial KPI (debtness...
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 11 comments
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Vendor Rating must be Fair
Vendor rating needs a system which is fair between vendors. We should ask ourself what is the priority? Price or performance? It is difficult to get the lowest price with the best performance/quality....
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 3 comments
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Advanced insights about Vendor Rating. Here you will find professional advices by experts.
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Various sources of information regarding Vendor Rating. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.
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Supplier Evaluation and Selection. Process and Methods Vendor Rating, Supplier Selction Presentation about supplier (vendor) selection, includes following sections:
1. Importance of Supplier Selection
2. Su...
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Compare with: Kraljic
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