Designing vendor evaluation systems: An empirical analysis

•We investigate how vendor evaluation systems (VESs) are designed and executed in large international firms.•We investigate benefits and costs achieved through VESs by firms.•We conduct multiple case studies in different industries.•We identify the variables connected to the satisfaction with the VES.

Companies today are increasing efforts to develop their vendor evaluation system (VES) to qualify and select the best suppliers, monitor their performance and foster continuous improvement. VES lies at the intersection of three disciplines: purchasing management, supply chain management, and performance management. The extant literature especially focuses on vendor rating tools from a mathematical modeling standpoint, whereas firms are mostly concerned with guidelines necessary to design and implement an effective VES. The present study develops an encompassing research framework to investigate VES by means of thirteen case studies. In particular, the paper investigates VES design in terms of strategic alignment, process configuration and execution, as well as corresponding benefits and costs, exploring how the combination of the previous elements determines company satisfaction. Three groups of VESs are identified, leading to different levels of satisfaction.