Use a search engine, any search engine, and type in Vendor Scorecard or Supplier Scorecard. The results will include hundreds of hits on the Internet. What I find a bit surprising, however, is the hundreds of hits result in very little subject matter diversity. There are vendor scorecard templates, software, samples, developing successful scorecard articles, and some organization specific vendor scorecard criteria. This was far from my preconceived notion of what would appear in my search results. Scorecards are very much a part of supply chain practice these days. World class organizations are utilizing them; but it seems very few are discussing them openly.
Where are the success stories associated with vendor scorecards? What are some of the best demonstrated practices? How do suppliers and customers collaborate for a win/win partnership? Is there collaboration between customer and supplier, or does the customer methodically adhere with scorecard criteria for review? How often does an organization review their scorecard criteria to determine its value?
I reached out to organizations and some of their suppliers. Given the standards of confidentiality, I am not at liberty to share their names; however, I am at liberty to share their comments: To provide some demographic the organizations have sales of over a billion dollars and are public companies. This is what supply chain professionals and their suppliers had to say:
“Our customer has never discussed a scorecard with us. We receive awards if we perform, but they have never laid out the criteria for our performance.”
“We deployed a vendor scorecard five years ago. We have the correct compliance measurements in place; however, the data we are capturing for compliance is still questionable. We discovered we measure on the accuracy of ASNs when received; however, we do not measure the number of POs to ASNs. So if they transmit only 10% of their ASNs, even if all incorrect, their compliance level on their scorecard is high. We continue to work to better our data capturing.”
“We deliver scorecards to our vendors monthly. The scorecard is a compilation of reports from a cross functional group. The vendor receives notice to download the monthly reports on line and review. There are several reports and are probably confusing our suppliers. We know we are not truly partnering with our suppliers for best results, and will continue to look for better ways. However, until that time we will work within the parameters we have in place today.”
“We wanted to assure we were in compliance with our customer, however, did not know how to go about improving our scorecard. Our ASN continued failing in translation in our customer’s system. Our product manager put us in touch with their EDI department. Through their willingness to help us we were able to troubleshoot the issues and correct them.”
I could continue with what customers and suppliers had to convey; however, the above is a good cross representation of literally the same comment by several. Organizations are finding their scorecards and the processes governing them may need revisiting. They do want to collaborate with their suppliers for a better partnership, and they understand the benefits of solid supplier relationships. Suppliers do want to be in compliance, but need guidance on their performance and how to improve. They too want a partnership.
So as I was near completion of this article, a huge success story regarding vendor scorecards emerged! Procter & Gamble developed and launched a supplier environmental sustainability scorecard that proved to be a success.
The result of their specific scorecarding increased collaboration with suppliers. It also had specific results like reducing manufacturing scrap, replacing petroleum-based materials, and improving the transport process. When combining all suppliers and all categories, improvements in 55% of measurements resulted in a year’s time. In the words of P & G:
“Our scorecard is about collaboration and innovation, and it’s working,” said Rick Hughes, P&G’s Chief Purchasing Officer. “About 25% of our external business partners offered innovation ideas where they could work with P&G to further improve our environmental footprint, and we are working now to exploit those.” At the same time, the scorecard results clearly show that there are plenty of areas of opportunity. “We will continue to work with our external business partners on ways to reduce their environmental footprint and improve their score,” said Hughes. “This is a journey, and we’re just at the beginning.”
Yes Cyndee, there really is a Santa Claus! Are you the next success story waiting to happen? I hope a year from now my search results contain more of the above. We should have progressed from the “how do we do it” to “let’s talk about the results,” and if we do not have good results, lets talk about improvement.