The Road to Elegant and Effective Supplier Scorecards

The Road to Elegant and Effective Supplier Scorecards

About the Client:

Our client is the world’s largest drive and motion manufacturer providing automation solutions and support in North, Central and South America.

 

Business Objective:

The key objectives of the Supplier Performance Scorecard are to set the performance standards for suppliers and objectively evaluate their performance and value they create.  The goal was to form sustainable relationships that enable marketplace success and mutual reward.

Our client wanted to:

  • Direct action for supplier development and performance improvement
  • Drive behavior to improve the overall performance of the supply base
  • Formalize and automate a holistic supplier performance process
  • Identify root causes for low performance
  • Link performance to opportunities for business growth and recognition
  • Provide quantitative and qualitative feedback to suppliers
  • Reinforce our client’s commitment to and the ongoing expectation for continuous improvement
  • Weed out under-performing suppliers

 

TekLink Solution Offered:

TekLink produced a Supplier Performance Scorecard built on SAP Business Warehouse 7.40, SAP NetWeaver (Web Service and BSP Wrapper), SOAP Web Service, Java Servlet/Lotus Notes using SAP dashboards measuring Key Performance Indicators (KPI).  The scorecards were calculated quarterly for each fiscal quarter and published on the Supplier Portal in the first week of the subsequent fiscal quarter.  Scores were based only on transactions in each quarter, where transactions are based on goods receipts.  The scorecards rated supplier performance on cost, delivery, quality, working capital and responsiveness.

 

Outcomes and Benefits:

Our client realized the following outcomes and benefits from using Supplier Performance Scorecards:

  • Achieved a holistic supplier performance process to improve overall performance of supply base and identify causes of low performance
  • Avoidance of supply chain risk and disruption
  • Close collaboration with suppliers working on a common goal of highest quality product at the lowest price
  • Cost avoidance and substantial savings achieved
  • Improvement of internal processes using dashboards, in-depth reporting and analysis
  • Link performance to opportunities for business growth and recognition
  • Protection and improvement of brand and reputation
  • Reinforce client’s commitment and ongoing expectation for continuous improvement
  • Segmentation and ranking of vendors to meet the organizations expectations and requirements

 

Customer Quote:

“The supplier scorecards have enabled us to identify the top and bottom performers using fact-based metrics and initiate corrective actions to optimize our procurement processes, improve compliance and lower costs.”

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