Three judges sitting at a desk assigning scores

Supplier Scorecarding Best Practices

Helen Timothy
April 12, 2021

TraceGains Supplier Management: Automate and digitize your supplier and sourcing programs for real-time insight and easy audits.

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Manage Suppliers and Sourcing Like a Pro

For many companies, finding, qualifying, and managing suppliers, items, and ingredients are manual and disjointed processes. Documents are filed away, and the data they contain can’t be used for insight or easily accessed for an audit. TraceGains Supplier Management can help by digitizing and automating your supplier and sourcing programs.

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Most food, beverage, and supplements companies know they need to evaluate their suppliers on a wide range of supplier behaviors, but this effort has been historically labor-intensive for many companies.

Due to the manual process and the number of data points involved, most companies are lucky to generate a supplier scorecard more than once each year. Typically this exercise is completed using spreadsheets and can be prone to error as individuals physically transcribe data from static systems to spreadsheets. 

Everyone would agree it's best to include a broad range of behaviors, but time constraints often force companies to track only a few supplier performance attributes. In worst-case scenarios, companies are only able to measure the price and timelineness of deliveries in their supplier rankings. 

TraceGains makes this process easier with automated supplier scorecarding. 

Creating Supplier Scorecards

TraceGains provides a comprehensive look at your suppliers, making it easy to create supplier scorecards that track the performance metrics most critical to your business. 

Performance metrics include:

  • Responsiveness to purchase order acknowledgment (POA) requests.

  • How well do their CoAs meet your individualized specifications?

  • Was the product received by the promised delivery date?

  • The condition of the product at receiving.

  • Does third-party and in-house testing validate, or conflict with supplier-provided CoAs?

  • Did the product cause other issues despite passing other set requirements?

  • How well has the supplier met your documentation requirements?

Companies can assign different weights to each performance metric, so the end score accurately reflects how a supplier aligns with your goals and requirements. Companies can run the reports as often as needed. 

TraceGains customers typically choose 10-20 different performance metrics grouped into 3-5 subcategories to create their supplier scorecard formula. Companies usually choose metrics with respect to supplier documentation and ingredient shipments. Each of the elements is weighted individually, and the most easily understood scorecards will attempt to total 100 points as a perfect score. 

Reviewing Supplier Scorecards

Run reports on TraceGains to see the scorecard results for all suppliers, or generate a specific supplier scorecard for individual suppliers. In-house staff can view supplier-specific scorecards and digitally share results with external stakeholders.

Additional Best Practices

The most useful scorecards are those that include metrics from:

  • The purchasing process: How timely is the supplier’s acknowledgment of your PO?

  • The CoA scores: How well did the supplier meet your specifications?

  • The receiving process: Does the product arrive when the supplier said it would come and are there any issues at receipt?

  • The QA process: Does your testing validate the attributes your supplier told you they measured?

  • The floor feedback process: How frequently is your supplier’s material involved with production-floor issues even though it may have cleared all previous hurdles?

  • The documentation process: Is documentation submission timely, and does it meet your requirements?

Supplier scorecards are a vital tool for improving supplier relationships. Many TraceGains customers find that the first scorecard generated for their suppliers falls short of expectations - but by sharing the results and openly discussing why they emphasized specific metrics, they improve the relationship. The majority of scores climb steadily month-over-month, provided companies share results and use them to start a dialogue with their suppliers. 

Supplier Management streamlines supplier qualification and sourcing, automates scorecarding, collects and digitizes supplier documents, extracts data from those documents, and organizes it into supplier performance dashboards and reports. Want to learn more? Read more about Supplier Management here