7 reasons to start applying Vendor Rating

Dirk Jan explains: "Surveys are an important part of the supplier evaluation process. Thanks to ISPnext's Vendor Management , you can create your own surveys, set them up in the organisation and thus gather employee experiences with suppliers quickly and easily. The survey template you select depends on the ultimate purpose of your survey. If you are obliged to evaluate suppliers because it is stipulated by the ISO, you ask different questions than when there is a specific problem in the organisation and you want to gauge the opinions of employees. Overall, we often see the need for Vendor Rating arise in mature procurement departments." 

 1 | Measuring quality

Dirk Jan: "The most obvious reason for starting to apply Vendor Rating is because you simply want to gain an insight into the performance of suppliers. Buyers procure products, but hardly ever see or use that product. It is therefore essential to gather feedback from the organisation to be able to gauge satisfaction with deliveries. "

In this case, Vendor Rating is also the way to give employees a platform to share their views. "We see that organisations that regularly sit down with their key contract suppliers to discuss performance are very willing to complete Vendor Rating surveys. The completion rate easily exceeds 80% in these organisations. After all, employees know that if they give their opinion of the relevant supplier now, something will be done with it in the near future, so something will change soon." 

2 | Specific problem in the organisation

Vendor Rating can also be a solution if there is a specific problem in the organisation. "Suppose you have heard employees complaining around the water cooler for weeks. A survey such as this is the perfect opportunity to identify complaints. A specific survey is devised for a number of suppliers for which there have been complaints or negative experiences in the organisation for some time. Performance can be adapted or another supplier can be contracted on that basis."

3 | Data for evaluation meeting with supplier 

Many organisations meet with their key contract suppliers periodically. Certain agreements were made when the contract was agreed and the procurement department naturally wants to know whether those agreements are being fulfilled. Dirk Jan: "By doing Vendor Rating surveys periodically, you have concrete data that you can use in evaluation meetings with suppliers. This data often consists of a combination of hard and soft factors. The hard factors, such as pricing reliability and delivery reliability, can often be retrieved from external systems. By substantiating these with employee opinions and experiences, you can give the supplier a very complete idea of the image they have in the organisation. The ultimate goal is to be able to adjust and optimise performance. " 

4 | As part of some ISO standards 

Vendor Rating is stipulated by specific legislation or regulations in certain sectors, such as healthcare and production. For example, ISO 15189 standards oblige medical and clinical laboratories to develop quality management systems. In this case, Vendor Rating in the healthcare sector is seen as a system to measure and guarantee quality. 

"These organisations must be able to show they have applied Vendor Rating periodically (often annually). They use Vendor Rating to conduct surveys periodically and gain quick insight into results."

5 | (Re)contracting of suppliers 

"A number of supplier contracts in your organisation are due to lapse soon. Time to take action! But how do you determine which contracts you are going to extend and for which procurement packages you might need to seek another supplier? The data collected in Vendor Rating surveys helps you make the right choices in terms of (re)contracting. Are employees dissatisfied with a particular supplier, and do systems show that deliveries are not being made on time? This could be a reason to contract another supplier." 

6 | Set of requirements for tenders 

"We also see that Vendor Rating can play an important role in the run-up to tenders. By conducting a Vendor Rating survey for a specific procurement package, you gain insight into what is important to employees. Suppose many employees are vegetarian. You can specify in the set of requirements for contracting a new caterer that the range should contain a sufficient variation of vegetarian dishes, for example."  

7 | Benchmarking within a procurement package  

You can create separate question templates for each procurement package in Vendor Rating. "Suppose you have ten different software suppliers in the ICT procurement package. Nine score well, but the majority of employees are dissatisfied with one software supplier. Is it perhaps possible to transfer this software supplier's deliveries to one of the other nine suppliers who are performing well?"

Vendor Rating, like the Supplier Portal, is one of the modules within Vendor Management.