- 20 February 2014
Supplier performance scorecards and supplier stratification modeling are related concepts, but very different in how they should be used. A supplier performance scorecard program should be used between an organization and its suppliers as a means of evaluating the performance of the suppliers against mutually agreed upon or accepted criteria. Supplier stratification should be an internal metric, where an organization takes other criteria (one of which can be the scorecard metric) and combines them to rank its suppliers (traditionally in an ABCD type model). The information below will help guide anyone wanting to implement either concept in their organization. Successful implementation of these concepts will have a positive impact on supplier relationships, operational efficiency, and improvement of EBITDA.
Part 1 – Supplier Performance Scorecarding (SPS)
Common SPS Criteria
Part 2 – Supplier Stratification
Why Stratify your Supplier Base?
Best Practices Criteria
Part 3 – Conclusion
Scorecarding and stratifying the supply base can result in many powerfully compelling benefits, from ensuring optimal allocation of time and resources (which are already limited and sometimes compromised), to creating opportunities for strategic partnerships. Implementing these concepts will have a direct impact on your organization’s EBITDA and cost savings, and allow for maximizing of value for the organization as well as its customers.
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From an Epicor White Paper
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