Advantages of Supplier Scorecard at Metalcraft -

Improved Ratings system: New supplier scorecard eliminated single audit concept
and introduced performance metrics such as Quality, Timing and Delivery.
Reliable selection of suppliers: Green ratings on a supplier indicated surety of the
selection without any high-level approvals
Prevent recurrence of defect: Apart from the launch Quality rejects (QR) information,
hyperlinks involved in the scorecard provided more detail, such as part number, QR
code and number of defective items. This helped plant quality managers in
preventing recurrence of defects.
Avoiding issues before production: The scorecard helped SD engineers to recognize
and resolve the problems earlier by checking the supplier performance daily rather
than to resolve the problems until they are significant.
Prompt flow of information to the supplier’s top management: The quality rejects
information initiated by Metalcraft directly flows to the top management of the
suppliers and helps in expediting the problems.
• Improved awareness of Supplier performance: The scorecard helped the suppliers to
improve their performance and monitor the health of their relationship with Metalcraft
to strengthen their position in new business opportunities.
• The Scorecard helped product engineers, manufacturing engineers and managers in
evaluating potential suppliers for new prototypes, referring past supplier performances
in meeting the deadlines and selecting strategic partners for new projects respectively.
• More timely planning & Delivery: The score card emphasized on timely delivery in
selecting the supplier which helped in reducing rescheduling costs due to delays of
inputs and also the higher Overtime Production cost and additional cost for accelerating
the delivery of incoming parts.
• Avoided conflict in Selection of Supplier: The score card avoided conflicts in selection of
supplier based on prejudiced behavior of buyers and plant managers. The new improved
supplier score card has consolidated supplier performance and evaluated the suppliers
based on three parameters- Quality, timing and delivery, thereby allowing the buyers to
source the materials from suppliers more strategically than it was earlier.
Disadvantages -
• External factors on parts reflected on Supplier’s credibility: Post batch- Production from the Tier-2
suppliers, some parts supplied by one supplier were rejected by claiming the parts to be dirty. The supplier
however, is responsible for the condition of the parts at the time of Production and Quality checks alone,
and not after the transfer of ownership. Although, the supplier has shipped the products in good condition,
the external factors has influenced in rejecting the parts and thus incurring additional costs for the supplier
and also reducing his QPR, which affects the futures business of the supplier.
• Difficulty in understanding the Supplier Score Card: The users of the Supplier scorecard found it difficult in
comprehending the parameters mentioned in the supplier score card due to undefined supplier codes and
the acronyms used in the score card.
• Reduced versatility in Supplier selection: Due to fluctuation in supplier scorecard ratings, the Negotiation
on prices with Tier-2 suppliers became difficult due to reduced number of Suppliers.
• Lack of cross-functional team involvement: The quality team was not directly involved in the purchasing of
the parts and the end decision often involved just the Price negotiation.
• Personal decision factors: According to certain suppliers, the Supplier’s scores didn’t impact the sourcing
decisions made by the Metalcraft, even if the scores dropped below a certain threshold.
• Inadequate detailed data: Score card did not have detailed data and query functions that would be useful in
evaluating and selecting suppliers. Product specific data of supplier would help in evaluating and selecting
the suppliers.
How are the incentives of the various participants in the procurement process
at Metalcraft influencing the use of the scorecard?

Players -
• Product Design Engineer: Set targets on prototype launch based on cost, weight and
performance and support buyer with design recommendations.
• Plant Quality Engineer: Inspect incoming parts and minimize Launch Quality Defect Rates (QR),
thereby producing the high-quality products to the OEM’s. Identify bottlenecks such as faults
with Tier-2 supplier Production processes.
• Supplier Development Engineers: Scorecard allowed them to review performance daily and
recognize problems earlier Resolve supplier deficiencies and improve supplier performance
• Buyer: Reduce cost of purchasing through effective price Negotiation strategies and expedite
procurement decisions based on the scorecard parameters.
• Suppliers: The Score card provides feedback to the suppliers to evaluate their internal
performance and subsequently improve their process , thus motivating them to move from red
-yellow to green category. This will further strengthen their future business relationship with
Metalcraft.