Getting Blood From a (Supplier) Scorecard

As the cliche goes, you can't get blood from a stone. And the same could be said for getting actionable information from a supplier scorecard. Last week, I came across this excerpt from a Ventana Research Study that shows performance management approaches -- including scorecards -- are limited in supply chain operations. This is not good news, because even scorecards alone are not enough to gain an actionable perspective into how a supply base is performing overtime. The fact that, according to the study, "the specific supply chain operations not being served by scorecards include product design, planning, sourcing and procurement, manufacturing, fulfillment, distribution and delivery, and returns" is quite disconcerting indeed. Ventana Research subscribers can read the full study by clicking here. You can also read some past perspectives on supplier performance management from Spend Matters here and here.

The problem with procurement and operations scorecards is that they often look at supplier performance in isolation. For small companies with only a handful of operating sites looking to gain marginal visibility into supplier performance, this is not a big deal -- it's easy to roll-up a couple of spreadsheets on a quarterly basis to gain a broad perspective on operating trends within a supply chain. And you'll keep Redmond in business by paying the Bill Gates tax for Office and Access if you choose this approach. But this process always falls short when an organization needs a current view of performance to develop and react to changing conditions in the supply market to take action. And in addition, this model does not scale past a few operating sites even if passive data is enough. So you can take this Ventana report as doubly bad news. First, it's appalling that such a small percentage of companies are using scorecards to consider supply chain performance. Second, given these findings, it would seem that only a handful of global companies are taking a more active approach to monitoring supplier performance.

Jason Busch

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