Evaluating and Rating Suppliers Systematically
23-04-2021 5 min read
Supplier rating involves measuring, evaluating and assessing the performance of suppliers based on category-specific rating models. Throughout the entire process, buyers need to ensure that the rating procedures are transparent and comparable across the organization’s supplier base. To determine a rating, buyers evaluate data on a specific supplier (purchasing, credit rating, quality, logistics, technology) and derive key performance indicators. Ongoing review and monitoring of the data the rating is based on are of critical importance in order to optimize the supplier relationship.
Procurement teams need to organize and perform a number of activities within the supplier rating process: They need to obtain and manage business information, balance sheets, securities and credit insurance; conduct buyer surveys; evaluate data on different suppliers; determine supplier key performance indicators; and organize other follow-up processes.
If procurement teams are to handle the supplier rating process efficiently and ensure an adequate level of standardization, they need to rely on the support of a software solution that automates certain tasks and that covers all the activities within the process.
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