2. A vendor is any person or company that sells goods
or services to someone else in the economic
production chain.
Vendors or suppliers are given standing, status, or
title according to their attainment of some level of
performance, such as delivery, lead time, quality,
price, or some combination of variables.
It may take the form of a hierarchical ranking from
poor to excellent and whatever rankings the firm
chooses to insert in between the two.
3. For some firms, it may come in the form of some
sort of award system or as some variation of
certification.
It is a direct result of the widespread implementation
of the just-in-time concept.
4. To help the buyer in future selection
To provide buyer with the information helpful
in subsequent negotiation
To provide the buyer with the important
information which he can act upon any
corrective measure
5. Helping minimize subjectivity in judgment and
make it possible to consider all relevant criteria in
assessing suppliers.
Providing feedback from all areas in one package.
Facilitating better communication with vendors.
Providing overall control of the vendor base.
Requiring specific action to correct identified
performance weaknesses.
Establishing continuous review standards for
vendors, thus ensuring continuous improvement
of vendor performance.
6. Inexperience with Products and Services
Unfamiliarity With Corporate Operations
Resistance Within Company
Threat to Security
7. Vendors are rated on the basis of various
characteristics:
Time delivery
Quality
Price
Others actors such as
1. Supplying useful market information
2. Meet emergency order
8. Categorical plan:
This is a very subjective method.
Mangers from concerned department prepare list of
factors important from their views
Each of the major supplier is evaluated against each
evaluator’s list of factors evaluation is done in the
terms of
1. Good
2. Satisfactory
3. poor
9. Weighted point plan
the buyer decides on
1. Factor important form evaluation
2. Weightages for each factor
3. The vendor performance in respect of each factor
10. Cost ratio plan:
Under this method, the vendor rating is done on the
basis of various costs incurred for procuring the
materials from various suppliers.
The cost ratios are ascertained for the different
rating variables such as quality, price, timely
delivery etc.
The cost ratio is calculated in percentage on the
basis of total individual cost and total value of
purchase
11. The total delivery cost is Rs5000 and the total
purchases are Rs 1,00,000 then delivery cost ratio
will be
5,000 / 1,00,000 x 100 = 10%