Disadvantages of Vendor Rating; Where it is Difficult to Use

Vendor Rating
Knowledge Center

Best Practices

Sign up


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 counter productive.

  Armin Gruening
Engineering & IT Manager, Australia

Limited number of vendors

Agreed - or if not counterproductive, at least of very limited benefit

Student (University), India

Vendor Rating

Agreed, but do the vendor rating for breaking monopoly and try to develop a new vendor if possible.

Business Consultant, India

Vendor Rating in case of Limited Number of Suppliers

If there are limited suppliers, vendor rating can still be important to understand:
1. The supply effectiveness, and
2. The need to develop vendors (either the existing ones or new); it forms the basis for initiating vendor development.
Turning a blind eye to a problem will just keep it under the carpet.

Manager, India

Single Vendor? Do Vendor Assessment; not Vendor Rating

In the situation when you have a single vendor, there is no point in doing vendor rating, as you have nobody to compete with the vendor.
The best thing you can do here is vendor assessment.
Compare him to the standards you expect him to deliver to you.
For example say his overall Performance is 80%, but On Time factor is just 50%. Then push him to make him understand and improve that.
Try to understand where the fault is and then bring change in policies if necessary.
Meanwhile search for new vendors and develop them. As you develop more, then you can rate them and keep not more than 2 assured vendors for long term business. As you mentioned they are rare or few.

Start a new forum topic


More on Vendor Rating:
Special Interest Group

Do you have a keen interest in Vendor Rating? Become our SIG Leader

Vendor Rating
Knowledge Center

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2021 12manage - The Executive Fast Track. V15.8 - Last updated: 23-10-2021. All names of their owners.