1. What is vendor rating?
Supplier audit (or supplier verification) is the process of quantitatively evaluating and evaluating the potential of existing, potential suppliers , helping to select the right supplier to ensure production. business output is not interrupted and moves towards promoting continuous improvement.
Supplier assessment is very important for every business, especially those with long supply chains, depending on many suppliers. Vendor audits are part of business evaluation with business evaluation criteria ensuring a supplier’s suitability.
What is supplier evaluation and why does any business need it?
2. Purpose of supplier evaluation
Supplier assessment helps businesses know the current situation as well as predict in the future possible risks of the supply chain of goods and services. From there, managers will make timely decisions and measures to not disrupt the supply as well as minimize the risks.
The purpose of supplier evaluation is to obtain a list of potential suppliers to the business as well as to assess the suitability of existing suppliers. Specifically:
- For potential suppliers: From the list of potential suppliers, it is necessary to select the one that is most suitable for the business, then proceed to contact and negotiate the suitable terms. If it is favorable, proceed to sign a contract.
- For current suppliers: It is necessary to reassess the performance of current suppliers by determining compliance with current and future business directions; identify potential risks from that supplier to find timely alternatives.
In addition, supplier evaluation aims to better manage suppliers and stimulate suppliers to improve performance and quality of their products.
The purpose of supplier evaluation is to find suitable supply, avoiding supply chain disruption
3. The supplier evaluation criteria
The first rationale for evaluating and selecting suppliers is the criteria. Each business will have specific criteria to best suit the purpose of supplier selection and the situation of that business.
The supplier evaluation criteria can be mentioned as:
- Supplier Reputation: Supplier reputation in the market is considered a necessary condition when evaluating a supplier is good or not.
- Quality of products / services provided: The quality of products / services must always meet the set quality standards, with no or very few defective or damaged products.
- Product / service delivery performance: It is an important condition that proves that the supplier has delivered on schedule or not.
- Product / service price and payment method: This is the deciding factor in whether the contract is signed or not, the right price will promote long-term cooperation; Along with many different payment methods will help make payment more convenient.
- Vendor customer service: The customer service element also helps reflect whether the supplier values your business or not.
- Sustainability and long-term of suppliers: Sustainable development is an issue that is more concerned than ever in today’s market economy.
- Supplier financial risks: A good supplier will always ensure a stable source of finance, then the production and supply will take place smoothly.
The first rationale for evaluating and selecting suppliers is the criteria
4. When to evaluate suppliers?
Vendor evaluation is not a straightforward thing to do. In order to select suitable suppliers as well as ensure that the cost of the evaluation is minimal, enterprises need to have a specific supplier evaluation plan.
When to evaluate the supplier, how often depends on the capacity of the business. However, there are 3 important moments to evaluate suppliers that businesses should note:
- When looking for a new product or service supplier: Before implementing a project, a new business needs to evaluate and select a suitable supplier.
- When it is necessary to assess the current supplier’s status: For projects or activities that have been in business for a while, then it is necessary to assess the quality or periodically evaluate the suppliers. to detect supplier risks promptly, and prevent and replace suppliers promptly.
- When you need to find an alternative supplier: In the process of working with an old supplier, there was a problem; when periodically assessing a risky existing supplier, it is essential to evaluate and select a new supplier.
There are 3 important moments to evaluate a supplier
5. Management solutions for CRIF D&B Vietnam suppliers
Currently, there are 2 popular types of vendor rating:
- Subjective: Based on the company’s opinions, experiences and perceptions about the suppliers.
- Objectivity: Based on the data, cost, performance of the supplier through the reports.
Therefore, instead of businesses having to build their own management process and evaluating suppliers that take a lot of time and cost, there is a more optimal and objective way of evaluating suppliers that is to use the solution. supplier management of CRIF D&B Vietnam.
The supplier management solutions offered by CRIF D&B Vietnam include the SIR Supplier Information Report and the SEI Supplier Assessment Index. The report helps to provide an overview of the current situation of suppliers including business activities, financial capacity and the most up-to-date news.
For details, please refer to the Supplier Assessment for CRIF D&B Vietnam solutions .
Evaluate the provider with CRIF D&B Vietnam’s solution
The solution offers specific benefits for the business itself and the suppliers:
- For your business: For your business, the solution to provide supplier reporting in the most objective and accurate manner, helping to shorten and minimize costs and resources that businesses need to spend to Evaluate, find new or replace suppliers promptly.
- With the suppliers of your business: Suppliers will have a complete, timely and objective report about their business, from which to re-look at the business itself to propose measures to improve. maximizing production and business efficiency in order to match the criteria to participate in the supply chain of an enterprise.
CRIF D&B Vietnam is pleased to provide professional supply management solutions
Hope this article helped you know what vendor evaluation is and what is the purpose of vendor evaluation. Contact CRIF D&B Vietnam for advice on professional supply management solutions that best support your business in business cooperation: