Supplier Score carding - An intersting article for Purchase Professionals

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Supplier Score carding - An intersting article for Purchase Professionals

Post  Vadivelrajan on Tue Jul 12, 2011 4:14 pm

Supplier Scorecarding: Just The Beginning?
By Charles Dominick, SPSM, SPSM2

What Do You Do After Scorecarding?

For many organizations, going from not having a supplier
strategy at all to the point of using supplier
scorecarding can feel like a major accomplishment. But
getting to the point of measuring supplier performance
is more of a beginning than an end.

"There's so much focus on finding the right metrics for
the scorecard, collecting them, [and] managing the data
that some companies lose sight of what they are trying
to do," says Sherry Gordon, the President of the Value
Chain Group, a consulting firm that specializes in
supplier management process design and development.
"The reason you're doing [scorecarding] isn't just to
have a scorecard, but it's actually trying to get your
supplier[s] to improve."

Following up on needed corrective actions that were
revealed during scorecarding is key to turning supplier
performance measurement into supplier performance
improvement. "As you identify opportunities for
improvement with your key suppliers, you should track
them, discuss them with the suppliers, and follow up on
them until they're resolved," advises Gordon.

Failing to follow up on corrective actions requested may
make some suppliers treat your supplier management
program like a charade and, therefore, performance for
you will not improve. "If there's no follow up, then
suppliers will quickly catch on and understand that
you're not going to do anything," observes Gordon.
"They just know it has no teeth" and if your organization
isn't going to put forth resources towards improvement,
neither will they.

On the flip side, rewarding good performing suppliers is
equally important. While this reinforces the good things
that good suppliers do, its benefits extend beyond just
the current high performers.

"The suppliers that get recognized for performance or
achievement in different areas are also good role models
for other suppliers who say 'Wow! Look what they got
out of this. I want to do this, too,'" notes Gordon.
"So, it's not just the suppliers who are getting the
awards that benefit from this, but it has a motivational
aspect to it for other suppliers as well."

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