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.
Vendor Rating Special Interest Group.

Special Interest Group (226 members)
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Forum about Vendor Rating.
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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 ...
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Vendor Rating Usages
Any organization who carries out any activities to meet customer requirements expects information on his performance. Ve...
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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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