Vendor Rating is a system used to rate the performance of a current
supplier against established criteria.
Vendor Rating is NOT concerned with evaluating or appraising potential
Vendor Rating is quick and simple, you are able to see if a supplier is
underperforming or performing well at a glance.
In addition, Vendor Rating can be used for:
Supplier rationalisation – it can be used as evidence for removing
poorly performing suppliers from your supplier base.
Providing evidence to work with supplier to improve their
Identifying and supporting good suppliers
Vendor Rating Criteria:
When rating suppliers you must use the criteria which important to
you; this may vary according to goods or services purchased.
The criteria you use to rate suppliers could include:
Accuracy of Documentation
After Sales Service
Price – Does the supplier invoice for the price that has been agreed and
stated on Purchase Order?
Quality - Did the goods arrive in good condition? Are they faulty? Are
they as specified?
Quantity - Were the goods delivered in the quantities requested? Does
the supplier deliver part orders which can generate more work ie more
delivery notes to be checked, more invoices to be paid?
Accuracy of Documentation - Are the delivery notes and invoices
correct? Does the delivery note give a delivery date for undelivered items?
After Sales Service - How quickly does the supplier respond to a
reported fault? Do you receive a replacement in good time?
Delivery – Is the packaging suitable for the product being delivered (too
much packaging is as bad as too little)? Does the supplier delivery at a
time that is suitable for you? Does the supplier deliver in a suitable vehicle
(refrigerated vehicle for certain types of food deliveries)? Is the
pack/pallet size acceptable?
What rating system should you use?
You can use a Numeric System similar to that used in the worked
2 - Acceptable
3 - Good
4 - Very Good
5 – Excellent
Alternatively, you can use or or yes/no if you find this
meets your requirements
It is important that criteria and rating should be shared openly with the
supplier and other interested parties.
Vendor Rating is a flexible system which can be adapted and
implemented in any supply situation. The criteria used can be updated and
changed to suit the needs of your organisation.
Questions and Answers
Q: What is meant by vendor rating?
Q: What is the difference between supplier appraisal and vendor rating?
Q: What are the advantages and disadvantages of using a numerical
vendor rating system?
Q: Why is it important to give suppliers feedback on their performance?
Undertake a vendor rating on three of your suppliers using either one of
the forms given as example or your own organisation’s vendor rating
You should give feedback on the supplier’s performance to the supplier
and other interested parties.