Supplier Scorecard for Effective Supplier Management - Desklib

1
Supply Chain

2
Supplier scorecard
It refers to a technique to gather and present supplier performance data. It offers the managers
useful insights for effectively managing and making wise decisions of their selection based
on their performance. Many business organizations buy raw materials from other enterprises.
The performance of the enterprise also depends on the timely supply of raw materials1. The
efficiency with which raw materials are supplied by suppliers is checked by the enterprise at
regular intervals. An enterprise therefore, create a supplier score card where the supplier is
given points on the basis of different metrics and criteria. Then weights are assigned to
different criteria.
The Weighted-Criteria Evaluation System for choosing a supplier is designed as follows:
 Examine the key dimensions of performance mutually acceptable to both supplier as
well the client
 Check and collect performance data
 Assign weights to each dimension
 Assess performance measures between 0 to 100
 Multiply rating of each dimension by weight and aggregate of overall score
 Categorize suppliers on the basis of their overall score; such as Excellent, Good,
Acceptable, Poor, and Very poor 2
1 Fu, Y.K. (2019) An integrated approach to catering supplier selection using AHP-ARAS-
MCGP methodology, Journal of Air Transport Management, 75, pp.164-169.
2 Ghadimi, P., Toosi, F.G. and Heavey, C. (2018) A multi-agent systems approach for
sustainable supplier selection and order allocation in a partnership supply chain, European
Journal of Operational Research, 269(1), pp.286-301.

3
 Audit and execute constant certification review
All the four categories of supplier indicate:
5 Excellent: If Supplier exceeds the expectations
4 Good: If Supplier meets the expectations
3 Acceptable: If Supplier meets most of the expectations
2 Poor: If Supplier needs improvement
1 Very poor: If Supplier needs major improvement for the short term
In the weighted-point method, the core characteristics of an ideal supplier are chosen by a
firm, and each are assigned a weight depending on the their perceived relevance. The firm
then, assign weights to prevent or reduce any kind of subjectivity. The assigned weights for
each performance category is then multiplied by the performance score that is assigned to it.
At the last stage, these numberings are aggregated to give a final rating for each supplier.
Reason for choosing the Weighted Point Method
This method has been preferred and used because it is considered to be highly reliable and the
cost of its implementation is quite reasonable. Furthermore, this method makes use of both
qualitative as well as quantitative performance factors in the process of evaluation. This
weighted point system is more flexible than other techniques of supplier evaluation as the
firms can alter the weights assigned to each performance category, or change the performance
categories themselves according to their strategic priorities. Another reason for choosing this
system is that the weighted-point method can eliminate the subjectivity of the categorical
system.
Factors to be considered in the selection process of supplier
Quality & Safety