Supplier Scorecarding: Just The Beginning

PurchTips edition #234

What Do You Do After Scorecarding?

For many organizations, going from not having a supplier management 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.”

Do You Want a More Rewarding Procurement Career?

Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.

Earning your SPSM Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!

Need Better Performance From Your Procurement Team?

Are you a procurement leader whose team isn’t achieving the results you know are possible? Maybe it’s not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.

You need a performance improvement plan that’s easy to implement and quick to produce results. The NLPA can help.

Download our whitepaper “The Procurement Leader’s Guide To A More Successful Team.” You’ll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.

Are You Getting The Most Out of Your NLPA Membership?

Members of the NLPA get more than just articles like this by email. As a member, you also get access to:

  • The Procurement Training & Certification Starter Kit
  • The latest Purchasing & Supply Management Salaries Report
  • Leading-Edge Supply Management™ magazine
  • Members-only webinars 10x per year
  • And more!

If you haven’t been taking advantage of these benefits, why not log in and start now?