In a recent column for spendmatters.com, Andy Kohm, CEO of VendOp, described vendor scorecards as “hideous instruments for the collection of insight into supplier relationships.”
Among his complaints were that the scorecards take too long to fill out, that they are too infrequent (partly because they’re so long), and that they’re too formulaic. Wrote Mr. Kohm, “We should not grade vital business relationships without the color, context and additional meaning that stories, anecdotes and language provide. You can’t measure everything through checkboxes.”
According to Supply Chain Digest’s “The State of Retailer-Vendor Supply Chain Relationships 2016,” 51 percent of retailers said they have a formal vendor scorecard program. Another 19 percent said such a program was in development.
A separate Supply Chain Digest report from 2015, “The 13 Steps to a Successful Retail Vendor Compliance Program,” showed that the two biggest problems retailers are seeking to solve through related compliance programs were reducing DC “problem” shipments and shipment accuracy. That was followed by poor fill rates, late shipments, transportation/carrier/routing guide problems, floor ready problems, and labeling and documentation errors.
The report noted that vendor compliance programs in general remain controversial because non-compliance leads to “chargebacks” or penalties, often seen as arbitrary to suppliers.
“There are two sides to this coin,” wrote Dan Gilmore, editor at Supply Chain Digest in a recent article revisiting the study. “One respondent in a side comment noted that ‘It isn't at all about the chargeback, it's about perfecting retail logistics.’ But another said, ‘We simply were not able to identify all the violations we were experiencing with our internal systems, and now with this software we can.’”
Mr. Gilmore felt the research’s findings around the benefits of vendor compliance programs remain valid today.
“The overall message was clear: retail vendor compliance solutions deliver a wide range of important operational and financial benefits, with a strong ROI,” wrote Mr. Gilmore. “I am sure that is as true today if not more so, given the added pressures of e-commerce and highly competitive retail environment, as it was when the study was first completed.”
- 4 Reasons Why Supplier Scorecards Don’t Work – spendmatters.com
- Use of Retail Vendor Scorecards and Portals – Supply Chain Digest
- The State of Retailer-Vendor Supply Chain Relationships 2016 – Supply Chain Digest
- The 13 Steps to a Successful Retail Vendor Compliance Program – Supply Chain Digest
- Look Back at the Value of Retail Vendor Compliance – Supply Chain Digest