A Supplier rating (or vendor rating as it sometimes referred) is a business term used to describe the process of measuring an organization's

supplier capabilities and performance. Supplier rating often forms part of an organization's supplier relationship management program. Such systems can vary in the criteria that are assessed; this broadly falls into quantative and qualative types [1] can be used as when undertaking vendor rating, the process varies from one organization to another common criteria often include: 1. Quality for example number of not right first-time deliveries 2. Delivery schedule adherence 3. Cost/Price 4. Capability 5. Service Results of each variable are then weighted into a final score usually a percentage, allowing suppliers to be ranked. Supplier rating is an ongoing activity[2]; suppliers are often assessed continuously or periodically (i.e. assessing the last year's trading). Various criteria can be analyzed within supplier rating systems a common approach is to utilise Cost Quality and Delivery measures and apply weighting against criteria in accordance with company requirements[3] Organizations then often band suppliers according to results which may commonly be used to highlight poor performing suppliers so that they can be removed from use. Supplier rating results may also trigger improvement programs on suppliers that score low. Trend analysis is often applied to supplier rating which allows organizations to monitor changes in supplier performance over time.[4]. Both suppliers and buyers should utilise supplier ratings system to drive performance and improve the business relationship.[5].
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with vendor rating

Effective supplier rating requires a consistent and objective approach where rating criteria are open to interpretation inaccuracy can be

introduced. This is especially true where subjective criticism from buyers is introduced into the rating process. It must be remembered that past history is not always a guide to future performance [6] and that suppliers should be consulted as part of the assessment.
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