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Use Supplier Scorecards to Collect Business Partner Perspectives

Those closest to everyday business decisions can offer valuable intelligence about the vendors they work with

Teams that work in a company’s business lines, developing products and dealing with customers, can provide their procurement team with a wealth of insight into suppliers’ performance. Via supplier scorecards, they can offer an inside perspective that will help Procurement understand whether or not these suppliers are meeting expectations and also find areas for improvement.

Procurement teams should start by developing the right kind of scorecard, and can use workshops for specific categories of spend (such as office furniture or digital marketing applications).

These workshops have two benefits: first, they will help procurement teams determine what their stakeholders most want from their suppliers, and so help the function create scorecards that will uncover performance gaps and hidden risks. Second, these scorecards also give procurement teams the chance to deepen relationships with their stakeholders, and get a better understanding of the business’s general priorities. This can only help make the function more valuable to the company.

Who’s Who: 4 Workshop Roles

To run a successful supplier scorecard workshop, Procurement should ask attendees to play four roles; the same person can play more than one of the first three roles if that works best.

  1. Facilitator:

    • Creates meeting agenda

    • Keeps participants focused on meeting goals

    • Drives decision making process

  2. Administrator:

    • Organizes the meeting

    • Takes notes and distributes to participants

  3. Sponsor (optional, but can be important for strategic categories of spend):

    • Makes sure the right people attend the workshop

    • Tests performance criteria for relevance to overarching business objectives

  4. Participants:

    • Share opinions

    • Help determine criteria for supplier KPIs

What Works: 6 Metrics and 7 Questions

Procurement teams will also need need to select KPIs at these sessions to track supplier performance and compare it across time.

It will help to bring examples of KPIs that have worked in the past to generate ideas for what should go on the scorecard. These six metrics work best: cost, delivery and support, flexibility and ease of doing business, quality, partnership, and risk and compliance.

For each metric, procurement teams can then dig deeper with these seven questions:

  1. What equates to satisfactory performance for suppliers in this category?

  2. If we hired a new supplier today, how could they make an immediate positive impact? What defines a negative impact?

  3. Are there any measurements you already track that define “supplier success” in this category (i.e., service-level agreements, other pre-defined expectations)?

  4. What causes you a headache with suppliers in this category?

  5. What aspects of your supplier interactions should be measured in a scorecard?

  6. What do high-performing suppliers in this category do that lower-performing suppliers don’t?

  7. When you come across situations where you think a supplier can improve, what typically causes you to think that?

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