VENDOR RATING
SHWETAPADMA PRIYADARSHINI – 319SM101
SHIBANI SAHU -319SM1018
OVERVIEW
INTRODUCTION
METHODS
ADVANTAGE
VENDOR RATING INDUSTRIAL
PROCESS
CASE STUDY DISCUSSION
CONCLUSION
WHO IS A VENDOR ?
A vendor is any person or company that sells goods or
services to someone else in the economic production chain
VENDOR RATING
• Vendor Rating is a process where the suppliers are provided a status or a title
based on several factors such as credibility ,delivery, time ,price , quality of goods
supplied and or a set of such mixed variables.
• It may take the form of a hierarchical ranking from poor to excellent and whatever
ranking the firm chooses to insert in between the two.
• 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
INTRODUCTION
1. Vendor rating is a tool. Helping minimize subjectivity in judgement
2. Insures quality in the supply chain .
3. Supplier quality management is essential for improved operational performance.
4. Origin : to improve the overall performance, many firms are focusing on their
core competencies and outsourcing non-core activities.
Dynamic
specifying communicating
monitoring
METHODS OF VENDOR RATING
A FEW WAYS BY WHICH A VENDOR CAN BE EVALUATED ARE
LISTED BELOW:
CATEGORICAL METHOD
WEIGHTED POINT METHOD
COST RATIO METHOD
CATEGORICAL PLAN
THIS IS VERY SUBJECTIVE METHOD.
MANAGERS CONCERNED DEPARTMENT PREPARE LIST OF FACTORS
IMPORTANT FROM THEIR VIEWS.
EACH OF MAJOR SUPPLIER IS EVALUATED AGAINST EACH EVALUATOR’S
LIST OF FACTORS EVALUATION IS DONE IN THE TERMS OF
1. GOOD
2. SATISFACTORY
3. POOR
WEIGHTED POINT PLAN
THE BUYER DECIDES ON
1. FACTORS IMPORTANTS FROM EVALUATION
2. WEIGHTAGES FOR EACH FACTORS
3. THE VENDOR PERFORMANCE IN RESPECT OF
EACH FACTOR.
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 DIFFERENT RATING
VARIABLES SUCH AS QUALITY,PRICE,TIMELY DELIVERY ETC .
THE COST RATIO IS CALCULATED IN PERCENTAGE ON THE BASIS OF
TOTAL INDIVISUAL COST AND TOTAL INDIVISUAL COST AND TOTAL
VALUE PURCHASE.
BENEFITS OF VENDOR RATING
SYSTEM
HELPING MINIMIZE SUBJECTIVITY IN JUDGEMENT 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.
CASE STUDY ANALYSIS OF
[Link]
WE CAN’ BE EXCITED PUPPIES ON CAFFINE… WE
NEED TO BE LIKE RABID DOGS ON SPEED.
INTRODUCTION
FOUNDED IN 1995 AS ‘BINARY COMPASS ENTERPRISES’
RENAMED TO ‘BIZRATE’ IN 1998 WITH THE FUND 4.5 MILLION
USD FROM BOTH MISSION VENTURES AND MEDIA
TECHNOLOGY VENTURES.
WISH TO BECOME THE A.C. NIELSEN OF THE INTERNET
CURRENTLY , THEY HAVE 2 CORE BUSINESSES WHICH ARE
ONLINE RESEARCH AND E-COMMERCE.
THEIR TRAFFIC WENT FROM RANKING NUMBER 75 IN MARCH
1999 TO NUMBER 6 IN JUNE 2000.
SWOT ANALYSIS
STRENGTH- WEAKNESS-
• TRUST FROM CUSTOMER AND THEY TRY TO BE ON 2 BOATS AT THE
RETAILER SAME TIME.
• HAVING GOOD LEADER MANAGER ARE STRETCHED TO
• THEY HAVE GOOD PRODUCT. THEIR ABILITY BOTH
• STRONG RETAILER NETWORK PHYSICALLY AND MENTALLY
• REAL-TIME FEEDBACK FROM LOW CUSTOMER RESPONSE RATE
ONLINE SHOPPER TO THE SURVEY.
• ABILITY TO COMPARE PRICE THE RESULTS CAN BE
FROM VARIOUS RETAILERS MANIPULATED THROUGH
• CONTINEOUS IMPROVEMENT OF BIDDING AND AD PLACEMENT
FEATURES
OPPORTUNITIES- THREATS-
INCREASING NUMBER OF ONLINE • MANY COMPETITORS
SHOPPER. • CONTINUOUS INCREASING
HAVE OPPERTUINITY TO ATTRACT COMPETITORS.
MORE RETAILERS AND SHOPPERS • PEOPLE ARE BECOMING MORE
EXPANSION OPPORTUNITY IN E- CONCERN ABOUT PRIVACY POLICY
COMMERCE FIELD
REVENUE SOURCE OF [Link]
RESEARCH
E-COMMERCE
ON RESEARCH SIDE [Link] PROVIDES DETAILED DATA TO
VENDORS BASED ON CONSUMER SURVEYS ADMINISTERED AT THE
POINT OF PURCHASE
ON THE E-COMMERCE SIDE, BIZRATE COLLECTS COMMISIONS FOR
SENDING CONSUMERS DIRECTLY TO VENDORS FROM THE BIZRATE
WEBSITE.
THE BUSINESS MODEL FOR
BIZRATE
Pestal Analysis
Political Economics Social Technological Environmental Legal
Policy making GDP Social patterns innovation Environmental Labour law
and consumer stability and
behaviour business standard
taxation Inflation Changing The advent of the Budget allocation Discrimination
consumer needs intent and online law
retailing
Govt support Interest rate Social trend in Social media and Environmental Health and safety
education business growth sustainability law
Political stability Unemployment Social pattern Improved value
rate make companies chain network
more consumer
centric
THE BIZRATE RATING SYSTEMS
BY AUGUST 1999, 1700 RETAILERS WERE PARTICIPATING IN BIZRATE’S CUSTOMER
FEEDBACK PROGRAM.
USING THE COLLECTED SURVEYS, BIZRATE WAS ABLE TO AMASS A HUGE
DATABASE THAT CONTAINED DETAILED CUSTOMER FEEDBACK IN OVER A DOZEN
DIFFERENT RETAIL CATEGORIES
EASE OF ORDERING
PRODUCT SELECTION
PRODUCT INFORMATION
WEBSITE NAVIGATION AND LOOKS
ON TIME DELIVERY
PRODUCT REPRESENTATION
LEVEL AND QUALITY OF CUSTOMER SUPPORT
POSTED PRIVACY POLICIES
PRODUCT SHIPPING AND HANDLING
SAMPLES OF BIZRATE’S SORTING
OPTIONS
RED OCTOBER
October 1999 (“Red October”) company unveiled a new website.
BizRate unveiled new product search tool.
BizRate collected commission ranging from 1% to 20%.
BizRate began accepting what it called ”merchandising pods” on its site.
BizRate had studiously refused to accept advertising on its websites.
BizRate came into Top 10 most popular shopping site on internet.
Due to its success , the company was able to close another round of financing
in march for additional $50 million, Giving it a total of $77 million in venture
funding. This round of financing valued the company over $500 million
Pushing E-Commerce
In May 2000, company began charging referral fee for click-through.
Referral fee ranged from 40 cents to $2, depending on the Vendor.
BizRate researched the possibility of engaging direct E-mail Marketing to
customers in the Database.
Third idea to boost company’s merchandising efforts.
Finally, the possibilities to Bid for the higher spot.
A Fork in the Road
Debate on how to boost the e-commerce side of BizRate Business inside the
company.
Can the two sides of the business coexists?
Thank You