Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing

CHAPTER FIVE

Scorecarding Suppliers

FROM DATA COLLECTION THROUGH THE RFx (request for x: information, proposal, or quote) stage of the strategic sourcing process, most of a buyer’s time is spent analyzing current and future requirements for the spend category, conducting independent research, and developing and executing the RFx process. The scorecarding phase ties together the analysis and research already performed and the RFx responses received from the potential supply base. Scorecarding allows buyers to fully understand the availability of their requirements among the suppliers they are considering. Through this process, buyers are able to grasp how each supplier can provide specific value to their businesses. As supplier proposals are evaluated, buyers inch closer to decisions that will have real impacts on their organizations. Supplier scorecarding is a thorough and objective methodology for choosing the optimal supplier. It helps ensure that you make the right decisions in the selection of your future business partner.

The supplier scorecard should include both a quantitative and qualitative component in order to measure every aspect of each supplier’s offering. From a quantitative perspective, scorecarding provides a bid evaluation phase that compares pricing proposals and identifies areas in which suppliers have a competitive advantage. It also allows a buyer to easily pinpoint incorrect bids and errors made during the quoting process. On the qualitative side, the scorecarding ...