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Of course your scorecard should reflect what is important to your company and weight it accordingly. Together with my team, we took my brainstorm farther and came up with four categories that matter most to us with our vendors essentially, if our vendors could continually improve on these four points each year, our organization would benefit immensely. Dave, i put together a few fictitious metrics to show the type of things i would use.
Another big decision to make is what youll do because of the scores. A great and relatively inexpensive way to encourage scorecard improvement is a vendor of the year program. Some questions could be what was an example of a project that went well? What about that experience can we recreate for all future projects? If you make it clear they wont be penalized for honesty, then you may be lucky enough to get great feedback on how to truly improve.
Having defined the broad categories, we now have to build the nitty-gritty of the scorecard. Most vendors appreciate being measured on more than just price, and so all of our vendors were excited about the program as a chance to prove their holistic value to our company. He asked them to review it and then meet with us in a video conference discussing the program.
Despite the added work, tracking more data allowed us to trust our metrics and better compare our vendors apples to apples. So i have been learning all of this by the seat of my pants and some of it is hard to comprehend because i dont have the mentor to explain it to me. The maybe its from the report cards i received every semester in public school, but the a through f scale carries a lot of significance to me.
Weekly roundup improving vendor relationships the accounting minutethe accounting minute so, can you elaborate on your product pricing explanationyour average is the average of all prices for a given item? Garth i rank vendor pricing against other vendors based on the total quantity of items purchased during the quarter compared with price quotes from all competent vendors. For example, this vendor is flexible in requests to alter production is a difficult metric to track in our erp system. What will make your vendor scorecard program truly succeed is your diligence after implementation.
Tracking the time from when you place an order to when it gets delivered is a great way to compare vendors and encourage reductions in lead time. Even better is when the survey has an example for a top, middle, and bottom score for the metric so that scoring is more consistent across teammates. You can use my template as a starting point to build your own. Specifically, what exactly will you measure, and more importantly, how? For example, a pricing metric could be a comparison of costs between all capable vendors. At first, i was reluctant to start a scorecard program because i thought our company was too small and too busy.
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Should you track the time until delivery at to your location or delivery at port? If you ask a vendor to delay a shipment, will their lead-time artificially inflate? For most quantitative metrics, your accounting system should have the records you need. You must first authenticate to google analytics in the google analytics for wordpress by monsterinsights settings for this widget to work. To meet this goal, it takes experience, dedication, innovation and a commitment to excellence.
Your metrics should be a score for how your vendors are doing in aspects that matter most to you. Will vendors with consistently high scores obtain a preferred status? Will quality checks or audits happen less frequently? Will you distance yourself from vendors who are very cheap, but fail in every other category? Will you reward contracts based on scores? If you find yourself rewarding higher scores with more business, then your weighting is probably correct. Unfortunately, building the perfect metrics often takes some deep thought to get them right.
The communication is two-way we want all our vendors to reach perfect scores. Vendor scorecards strengthen supply chain relationships and help focus your suppliers on what matters most to you. I have attached a the first step in creating a vendor scorecard program is to define what your ideal vendor would look like.
At first, i was reluctant to start a scorecard program because i thought our company was too small and too busy. Depending on your suppliers, your experience could be much different, but heres what i did. You can clearly see where each vendor ranks against each other, which helps you decide which supplier to work with on complex projects.
Is it possible to see a sample company completed on this scorecard? Im trying to see sample numbers to see how the pcts are justified in each category. They detailed how their other customers forecast and recommended we try the same. Weekly roundup improving vendor relationships the accounting minutethe accounting minute so, can you elaborate on your product pricing explanationyour average is the average of all prices for a given item? Garth i rank vendor pricing against other vendors based on the total quantity of items purchased during the quarter compared with price quotes from all competent vendors.
For example, this vendor is flexible in requests to alter production is a difficult metric to track in our erp system. Either way, share your experience in a in our podcast interview with mark kosiba (former vp of operations at skullcandy), mark talks about vendor scorecards and their effect on his company. Most vendors appreciate being measured on more than just price, and so all of our vendors were excited about the program as a chance to prove their holistic value to our company. Many metrics were much more complicated to fully define than i thought they would be. Some can only receive an a or f, or a, c, or f, but they all have the same percentage score.
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