Procurement departments use Vendor Rating to monitor suppliers better in respect of agreements made in contracts. Vendor Rating is the process by means of which organisations evaluate their suppliers' performance in terms of delivery reliability, price reliability and services. Based on the results of Vendor Rating, supplier performance can be adjusted in a timely fashion so the relationship with the supplier can be improved or the decision can be made to terminate the contract and agree to a new contract with a different supplier.
In this blog, Maarten de Ru, Director of Partners & Alliances at ISPnext, explains how Vendor Rating works, against which performance indicators you can evaluate suppliers, which steps apply, what the possible results are, and we give a number of examples from practice.