Supplier Scorecards - Watchouts!

Scorecards - another popular methodology when administered and nutured properly are very powerful, however, left to haphazardousness - can be debilitating to all those that are stuck filling them out, reviewing them and driving them.

Scorecards are meant to highlight areas of performance that directly indicate or support the success or failure of an important outcome, knowing when you've met the goal and time to sunset the tracking and celebrating milestones.

Some of my favorite include:

Delivery Timeliness
Order Accuracy
Quality
Paid on Time

These stand alone measures have many implications that must be understood, researched and documented.  Let me give one of my favorite examples - "my supplier NEVER delivers on time" is the initial statement that leads to measuring supplier "on time".  Seems simple - right?  I want something on this date, your supplier says they can and a measure is born.

However, this is great if you exclude things like unforeseen forecast blips that trigger emergency orders, giving the supplier less than agreed upon leadtimes, output capacity greater than the agreed upon rates to mention a few "customer" induced issues - how do you understand the supplier limitations that put you in the "warning track" or worse asking the supplier for the impossible?  Remember suppliers are trained to say "yes" to their customers - creating the relationship that allows them to say no or maybe with additional costs or expectations is an art!

To know for sure, let's dig deeper ... as I don't know many suppliers that do not want to meet your needs.  Here on some questions I would ask:

1.  Did we honor your firm or order timeline = many times we place emergency orders not checking if the supplier can honor the request.

2.  Did we make any changes to the time or quantity

3.  Were your feedstocks or manufacturing processes healthy - if not, why

4.  Did another customer pull rank and consume my capacity - great to know where you are on the food chain.

5.  Was the transportation or my unloading a contributor


You want your measures to be tight enough to drive improvement, but not impossible.  When I say impossible I mean achievable within the next year.  I can always put 100% on time for railroad or ocean delivery on time, but chances are this will be a huge disappointment and waste of time for all involved.   However, targeting an XY improvement with the railroad or ocean freight may lead to some interesting discoveries for port inspection time or country specific delays, even what "class" of rail service you have purchases (cheaper is slower - but auto industry pays a premium and gets on time deliveries every day).  Being selective on your choices is key.  If you do not have the resources to drill and "help" - it's probably not a key priority.  Ensure you have resources, tools and passion to drive the improvement - then go back and get the next in line priorities.

Remember the rule - you get what you measure - if you are willing to do the work  :)