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.
Joe is Vice President of Product Solutions at Software Paradigms International (SPI), an award-winning provider of technology solutions, including merchandise planning applications, mobile applications, eCommerce development and hosting and integration services, to retailers for more than 20 years.
Joe is a 34-year veteran of the retail industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End, LifeSketch.com, Nordstrom.com and Duluth Trading Company. At SPI, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.