Strategic Use of Scorecards:
Critics may call it a bandwagon technique, but the fact remains that the use of a scorecard to measure supplier performance is becoming more and more common in the industry. Quite a few have it and those that do not, definitely want it. CW managers eagerly and readily translate this measurement into management input, by applying the insights to improve a supplier’s ongoing performance and delivery. Or, do they?
Many a time, the benefit of tracking a supplier performance through scorecards comes from an automatic ‘Big Brother is Watching Us’ kind of discipline with an automatic and reactive ‘best behavior’ response from the suppliers. This is bound to showcase a definite improvement – which may or may not last for very long.
Effective use of Scorecards:
While there is no one way to create a scorecard, the many parameters involved make it even harder to clearly identify the core factors that need to be tracked to derive optimum benefit through the resulting process improvement opportunities. Effective use of scorecards is possible only when the structure is put in place for the total strategy from the word – Go. For those who already have a scorecard in place and feel that they are not deriving an optimum actionable output from it also, a review exercise with clarity for the end result may be the answer.
Measure metrics that are important and relevant to the business and its goals rather than choose easily available metrics which may not be equally meaningful or desired.
Any real management of suppliers based upon scorecard data requires a lot of effective change management effort encompassing the overall supplier performance; where it could serve as an essential tool to facilitate such transformational changes rather than being the only tool employed to dictate the change.
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