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Suppliers Scorecard 2.0
21 June 2024
Supplier scorecards are an excellent tool for collaborating, managing, analyzing, and optimizing supplier performance. A supplier scorecard is a useful risk management tool that helps supply chain teams evaluate and track the performance of their suppliers and identify areas where improvement is needed. Today, many supply chain organizations focus on 2 main KPI's : 1. On-Time Delivery (OTD) 2. DPPM - Quality
There is no doubt that the above 2 KPI's are an integral and important element in any scorecard, but we believe that shifting to a wider 360° scorecard view can elevate companies' ability to manage their supply chains more effectively and ensure that they are aligned with their strategic goals and values.
With today’s multiple data systems and big data analytic tools, the scorecard can help track supplier’s performance and risks in many more fields of operation than the “traditional” scorecard.
Scorecard 2.0 will contain quality (DPPM), Delivery (OTD), Predictive Analytics, Geo-Political risks, Financial risks, Contractual status, Compliance with regulations, Pricing, Service, and other data points from various systems to create a holistic view that gives all parties in the supply chain the full visibility needed to make decisions in real time and in one view.
Would you agree that supplier collaboration is key? Would you take steps to improve yours?
Furthermore, this approach can bring additional gains: 1. Real-Time Collaboration - It’s vital to allow Suppliers access to the data collected for them via the supplier scorecard, so make sure it's accessible to them so they know how they're performing and where they're falling short. If you don't make this information available, your suppliers won't be able to improve their performance or deliver better products or services in the future and enhance suppliers’ collaboration.
2. Enhanced User Experience - User-friendly interfaces and visualization tools will make it easier for procurement professionals and suppliers to interpret and act on supplier scorecard data.
3. Risk Management and Compliance - Supplier scorecards can be used to manage and mitigate risks in the supply chain. This includes assessing suppliers' financial stability, compliance with regulations, and their ability to adapt to disruptions. These enhanced risk management features will help companies proactively address potential supply chain vulnerabilities.
4. Continuous Improvement - Scorecards 2.0 is not just about assessment but also about continuous improvement. Scorecard 2.0 include mechanisms for feedback and development, helping suppliers to improve their performance over time.
Remember, supplier collaboration is key to the digital transformation of any industry and helps achieve end-to-end PO visibility.