Automated Vendor Rating System: A Supply Chain Hero

Protecting Customers with an Automated Vendor Rating System

Although we all appreciate the human touch when it comes to business, it doesn't work well for everything. If you've worked in the electronic components supply chain long enough, you know that many companies manually track vendor performance information. Yet if you've been a human long enough, you're aware that manually scoring and entering data can lead to mistakes, inconsistency, and personal bias.

Sourceability thought there was a better way.

To provide customers with unbiased, reliable, and accurate vendor information, Sourceability devised a proprietary vendor rating system that computes a score for each vendor. It's one of the many ways the software picks the best supplier for your needs. Sourcengine customers benefit because all Sourcengine orders are sourced and fulfilled by Sourceability.

How Sourceability's Vendor Rating System Works

The rating system has four main categories: receipts, quality, timeliness, and impression. Each category is briefly described here:

Receipts—This portion of the score is based on how many orders Sourceability has placed with the vendor:

• 1 - 5 orders = 10 points
• 6 - 10 orders = 15 points
• 11+ orders = 20 points (max.)

Quality—Vendors can score up to 40 points based on defects per million (DPM).

Timeliness—Vendors that deliver on time receive the maximum of 30 points.

Impression—To capture other important factors, the Impression category rates a vendor's professionalism. Some examples include: a desire to work with us, willingness to negotiate, and good storage facilities. 10 points (max.)

Vendors can receive a combined total of 100 points.

Highest-Rated Vendors Are Displayed at the Top

As you can see, 90% of this scoring methodology is objective, with Impression being the only human factor. Although Quality weighs the heaviest, Timeliness is also a big differentiator.

In Sourceability, part searches are displayed with the highest-rated vendors at the top of the list. To further distinguish the vendor rating results, Sourceability color-codes vendors. For example, green means a rating of 90 – 100, while black signifies "do not use."

Maintaining a High-Quality Vendor List

In a perfect world, all vendors would score 100 points (and there would be no need for a rating system). Since that is not the case, Sourcengine has implemented a way to manage vendors whose scores fall below 65 points two times in one year. In these situations, Sourceability sends an email to the vendor, providing information about the areas that are failing or need improvement.

After 90 days, if a vendor has not shown improvement, Sourceability send a corrective action document. A vendor is removed from the Sourceability system if they fail to improve within the next 90-day period.

The Sourceability vendor rating system enables us to consistently and objectively measure a large number and variety of suppliers – in particular, franchise distributors and manufacturer direct vendors for offers available on Sourcengine. Best of all, we now have a credible and reliable way to better inform and protect our customers.