JTPP: Urban Outfitters Moves to Vendor Scorecards
By John Walsh
a special arrangement, presented here for discussion is a summary of
a current article from The Journal of Trading
Partner Practices (JTPP), the official online
publication of the Vendor Compliance Federation (VCF), Trade Promotion
Management Associates (TPMA), and the Federation of Credit and Financial
growing pains and facilitate its supplier management process, Urban Outfitters
is launching a Product Lifecycle Management (PLM) system which will provide
the information needed to scorecard vendor performance. A 20 percent rate
of growth over the past several years has engendered significant expansion
of its vendor base, which exceeds 1,500 suppliers today.
The apparel and
accessories retailer handles products for multiple divisions and manages
a supply chain that includes retail stores, wholesale accounts, websites
vendor relations and compliance manager at Urban Outfitters, said the information
obtained from the PLM system “will provide our buyers with a valuable tool
for determining the true cost of dealing with certain vendors. We expect
to use vendor scorecards as a way to reduce the amount of handling required
in our DCs. Vendors with good ratings will be fast-tracked through our
DCs, with limited or no added handling, including count verification.” He
said the system is expected to go live within the next year.
are issued from Urban Outfitter’s DCs, traffic department and quality control
department, with little linking of these various claims into one system. “The
PLM system will give us a single location for compiling and tracking all
of this information and give us a more accurate picture of who our problem
vendors are and the ultimate cost to our bottom line.” He said information
about the new system will be made available to its vendors through its
The move by Urban
Outfitters underscores a shift in the way retailers are managing the performance
of their suppliers. For years, retailers have relied solely on compliance
and deduction policies to manage their suppliers and encourage them to
meet their supply chain requirements. However, scorecards offer a more
proactive means of measuring supplier performance and enable retailers
to closely align themselves with vendors who achieve the highest grades,
while providing incentives to those whose scores are on the low end. According
to a recent VCF survey, 67 percent of retail respondents noted that their
buyers’ decisions are influenced by suppliers’ scorecard performance.
About a year
ago, Urban Outfitters launched a vendor website, which serves as a single
portal for vendors to access its routing, packing and ticketing information.
The creation of the website has also lifted a burden from the company’s
buyers, while elevating its vendor relations department to the position
of liaison between the buyers and vendors.
Mr. Hallett noted
that the increasing complexity of the marketplace greatly increases the
need for retailer-vendor collaboration to ensure the unencumbered flow
of goods through the supply chain. “The need for quick turn and greater
efficiencies makes it critical that Urban is communicating with our vendors
and, more importantly, making sure they fully understand our requirements.
Add this to an ever-changing landscape surrounding federal and state regulations
and we have an even greater obligation to make sure our vendors are educated.”
What are the pros and cons of using vendor scorecards for retailers over
typical compliance and deduction policies? What are overall obstacles
for retailers in trying to get suppliers to adhere to supply chain guidelines
such as accurate and timely deliveries?