Four Best Practices to Improve Supplier Performance Score Carding

September 12, 2019

Improve Supplier Performance

Many a time’s performance management initiatives within a supply chain are unsuccessful because they of a lack of structured approach to supplier Score Card (Performance measurement) and non-availability of right information. It is very important to improve supplier performance to have an effective and efficient supply chain.

The four best practices to improve are

Align Business cases with the Scorecards: It is very important to understand that when it comes to key performance indicators and performance metrics, the quality matters not the quantity. It is imperative to understand supplier performance expectations to run a successful supplier management program.

Before developing scorecards, it is important to understand how supplier performance can affect the whole business. And for this one needs to reduce procurement cost, minimize supply chain risks, get new opportunities, and discover additional value from suppliers.

Evaluation of Supplier Performance: After the scorecards have been made, it is necessary to discuss the supplier data management services with the suppliers. They need to be informed how they will be rewarded and recognized for their good performances.
Communication with Suppliers: Evaluation is the key to get the business running as it enables change in supplier performances. Supplier optimization is very important as after each performance it is expected to share the score card with the supplier’s to improve things from their end. There needs to be on-going communication with the suppliers to strengthen their relationship and also provide insights for improvement.
Internal Sharing of Information: The score card results are only useful when its results are shared internally among other supply chain departments. Only communicating with the supplier is not enough, the information needs to be passed on internally too. Purchase consolidation needs to take place and it is important that score card results are also shared with the stake holders.

We at Enventure, will help you have better communication with the suppliers and maintaining score cards, as supplier performance is a key indicator for supply risks and may indicate trouble ahead. Our experts will help you indentify the signs and provide risk assessment and time to take necessary action.