Vendor ratings are an ongoing activity by companies and are a process of
measuring the capabilities and performance of a vendor. These ratings
are part of the company’s vendor management program. Vendor ratings are
calculated from weighted variables, the most common being:
The final scores are compared and a final supplier ranking produced. Low ranking and performing suppliers can then be identified and the appropriate action taken.
This form of vendor ratings provide a process to review and rank a great number of vendors that they do or wish to undertake business with. There are a number of benefits that include:
Large retail companies such as Amazon and eBay also provide facilities for consumers to mark each of their sellers and provide feedback for other potential purchasers to read. These ratings have become an important part of the host company’s business model and the comments are sought after by potential customers.
Gartner, Inc., the leading provider of research and analysis on the global information industry, holds a well documented vendor ratings process that is hotly followed by large companies looking to contract new suppliers and review their existing vendor base. Gartner publish their vendor ratings criteria and award one of the following ratings:
Such is the cachet of Gartner’s findings that they are frequently proudly announced in the press.