Next Level Supplier Management Compass
Beyond Basic Scorecarding – Supplier Performance and Development Approaches to Drive Competitive Cost and Risk Advantages
Jason Busch, Executive Editor, Spend Matters
In a broader procurement and supply chain initiative context, most organizations give supplier scorecarding, performance management and development short shrift. Even within sub-portfolio areas such as supplier information management/ supply base management within purchasing and operations (comprising supply risk management, supplier performance management, supplier diversity and green/CSR supply chain, among other areas), companies often relegate scorecarding and supplier development programs to the back burner relative to other priorities. Or they carry them out in a very limited capacity because of a single enthusiast or proponent, but there is a lack of company-wide support.
It would be easy to dismiss the situation as fundamentally owing to the nuances, required collaboration and often cross-functional complexity of scorecarding initiatives. In reality, these initiatives often come up short because most organizations can’t fully carry them out due to over-weighted savings and supplier management portfolios in the sourcing and P2P areas without the requisite skills, technology and processes in supplier performance and development.
This Spend Matters Compass Series analysis will first examine why supplier scorecarding and vendor management programs often come up short. We will then examine tips and tactics for designing and rolling out these programs to achieve lasting returns and look into the importance of incorporating both qualitative and quantitative metrics into a scorecard. Finally, we will share two case studies from the field and provide recommendations for implementing and enhancing scorecarding and development programs.