Many procurement managers and executives often inquire as to whether using a supplier scorecard is an efficient use of corporate resources or a waste of necessary manpower in today’s corporate “belt-tightening” approach to managing purchasing operations. While there is no easy answer to this question, generally, the correct answer for each individual purchasing team will likely depend upon the size of the team, the contents of the scorecard and whether the results are considered in the final decision-making process.

As many of you know, a supplier scorecard is a tool available to purchasing managers to determine the effectiveness of vendors across the supply chain. Usually, scorecards provide managers with a resource to evaluate vendors across numerous dimensions to determine if corporate goals are being achieved, while simultaneously creating a uniform process to rank the performance and capabilities of each vendor. Small to mid-size corporate purchasing teams often find the process effective, yet time-consuming, while larger teams tend to find scorecards helpful, but not considered when critical decisions are made by purchasing managers and internal stakeholders.

Supplier scorecards can be effective, regardless of the size of the corporate purchasing team, as long as the scorecard (i) meets the goals of the corporate purchasing operation, (ii) is not time-consuming or burdensome on purchasing managers and the internal stakeholders and (iii) is instrumental in the decision-making process. Purchasing teams using or contemplating using supplier scorecards should determine the purpose of the scorecard, allocate time for completion on an ongoing basis and determine how the findings will be used in selecting, retaining or terminating a supplier. With proper planning, supplier scorecards can be powerful tools that ensure that vendors are accountable and corporate purchasing spends are aligned with purchasing goals.