Your vendors are critical partners in your business success. But how do you know if they're performing well? Gut feelings aren't enough. You need data.
📊 Companies that track vendor performance regularly save an average of 12% on vendor costs.
Why track vendor performance?
Regular vendor evaluation helps you:
- ✓ Identify underperforming vendors before they cause problems
- ✓ Negotiate better terms with data to back your position
- ✓ Make informed decisions about renewals
- ✓ Build stronger relationships with top performers
- ✓ Reduce costs by consolidating with better vendors
Key metrics to track
1 Quality
Defect rates, customer complaints, returns, compliance with specifications
2 Delivery
On-time delivery percentage, lead time consistency, backorder rates
3 Pricing
Price competitiveness, increase frequency, hidden fees, payment term compliance
4 Responsiveness
Response time, issue resolution time, proactive communication
Simple rating system
Create a 1-5 scale for each metric:
Tracking template
| Vendor | Quality | Delivery | Price | Response | Overall |
|---|---|---|---|---|---|
| ABC Supply | 5 | 4 | 3 | 5 | 4.3 |
| XYZ Logistics | 4 | 5 | 4 | 4 | 4.3 |
Automate vendor tracking
Trezbo Vendor Management makes it easy to track performance and get renewal reminders.
Try it freeWhen to review
- Monthly: Quick check of critical metrics for key vendors
- Quarterly: Formal review of all active vendors
- Annually: Comprehensive review before contract renewals
- Event-driven: After major issues or successes
Red flags to watch
- • Declining scores over time
- • Frequent excuses or blame-shifting
- • High turnover in your account team
- • Repeated billing errors
Regular vendor performance tracking takes time, but it pays off in better service, lower costs, and fewer surprises.