Creating a Vendor Performance Scorecard

I recently moved into a new house and was doing the requisite purging of years of accumulated stuff, including a few boxes of old work files. One of the dusty files was a project related to developing a vendor performance scorecard when I worked at Lands’ End around 20 years ago.

At the time, we felt like we were behind the curve — that good vendor performance reporting and scorecarding was standard for all retailers. It turns out we were wrong.

As I work with customers and prospects at SPI, I frequently encounter retailers of all sizes (large and small) and types (store retailers, direct-to-customer retailers) lacking reliable vendor performance reporting. Frankly, it’s surprising in today’s data-rich environment.

Given the importance of dependable, quality suppliers for retail success, it’s important for all retailers to address this. At a minimum, you should be providing reporting for on-time delivery and receipt accuracy.

Aiming higher, the best vendor scorecard I’ve seen included the following:

• on-time delivery;
• PO and ASN accuracy;
• chargeback amounts by chargeback classification;
• fill rate or in-stock rate; and
• final gross margin.

While not all retailers have good access to required source transaction data, some version of this information is always available.

If you're not happy with your vendor reporting, make this a 2017 initiative. It’s important and it’s doable.