Supplier Scorecard
Framework
IRON LAW: Evaluate on QCDS (Quality, Cost, Delivery, Service) — Not Just Price
The cheapest supplier who delivers defective parts late with no support
is the most expensive supplier. Total Cost of Ownership (TCO) includes:
purchase price + incoming inspection + rework + downtime from defects +
expediting fees + management overhead.
NEVER select suppliers on price alone.
Four Evaluation Dimensions (QCDS)
| Dimension |
Weight (typical) |
KPIs |
| Quality |
30-40% |
Defect rate (PPM), incoming inspection pass rate, certifications (ISO 9001), corrective action responsiveness |
| Cost |
20-30% |
Unit price, total cost of ownership, price stability, payment terms |
| Delivery |
20-30% |
On-time delivery rate, lead time, lead time variability, flexibility for rush orders |
| Service |
10-20% |
Responsiveness, communication quality, technical support, willingness to collaborate on improvements |
Scoring Method
- Define KPIs per dimension (2-3 per dimension)
- Set weights (must sum to 100%)
- Score each KPI: 1-5 scale with clear definitions:
- 5 = Excellent (top 10% of suppliers)
- 4 = Good (meets all requirements consistently)
- 3 = Acceptable (meets most requirements)
- 2 = Below expectations (frequent issues)
- 1 = Unacceptable (critical problems)
- Calculate weighted total
- Classify: A (>4.0), B (3.0-4.0), C (2.0-3.0), D (<2.0)
Supplier Classification & Actions
| Grade |
Score |
Strategy |
| A |
>4.0 |
Preferred supplier, increase business, joint development |
| B |
3.0-4.0 |
Approved supplier, maintain, targeted improvement |
| C |
2.0-3.0 |
Conditional, improvement plan required within 90 days |
| D |
<2.0 |
Phase out, begin alternative sourcing immediately |
Risk Assessment
| Risk Factor |
Question |
Mitigation |
| Single source |
Is this supplier the only source for a critical component? |
Develop backup supplier |
| Geographic |
Is the supplier in a region prone to disruption? |
Dual-source across regions |
| Financial |
Is the supplier financially stable? |
Monitor credit, require financial disclosures |
| Capacity |
Can the supplier scale with our growth? |
Capacity commitment agreements |
| IP |
Does the supplier have access to our proprietary designs? |
NDA + IP clauses in contract |
Supplier Development Program (SDP)
For C-grade suppliers worth keeping:
- Gap analysis: Where specifically are they falling short?
- Improvement plan: Specific, measurable, time-bound targets
- Support: Provide training, share best practices, co-invest if needed
- Review: Monthly progress checks, 90-day formal reassessment
- Decision: Improved to B+ → continue. Still C or worse → phase out.
Output Format
# Supplier Scorecard: {Supplier Name}
## Overall Score: {X.X} / 5.0 — Grade: {A/B/C/D}
## Detailed Scores
| Dimension | Weight | Score | Weighted |
|-----------|--------|-------|---------|
| Quality | {%} | {X.X} | {X.XX} |
| Cost | {%} | {X.X} | {X.XX} |
| Delivery | {%} | {X.X} | {X.XX} |
| Service | {%} | {X.X} | {X.XX} |
| **Total** | **100%** | — | **{X.XX}** |
## KPI Details
| KPI | Target | Actual | Score |
|-----|--------|--------|-------|
| Defect rate | <500 PPM | {X} PPM | {1-5} |
| On-time delivery | >95% | {%} | {1-5} |
| ... | ... | ... | ... |
## Risk Assessment
| Risk | Level | Mitigation |
|------|-------|-----------|
| {risk} | H/M/L | {action} |
## Action Plan
{Based on grade: preferred/maintain/improve/phase out}
Gotchas
- Weighting should reflect YOUR priorities: A medical device company should weight Quality at 50%+. A commodity buyer might weight Cost at 40%. Don't use generic weights.
- Score inflation: Purchasing teams may inflate scores to avoid difficult conversations with suppliers. Require data-backed evidence for each score.
- Review frequency: A-grade quarterly, B/C-grade monthly, D-grade weekly until resolved.
- Supplier relationship matters: Scorecards are tools for improvement, not punishment. Share results with suppliers transparently — the best suppliers want feedback.
- TCO includes hidden costs: Don't forget: incoming inspection labor, warehouse space for safety stock (to cover unreliable delivery), engineering time for quality issues, customs/logistics for overseas suppliers.
References
- For TCO calculation methodology, see
references/tco-calculation.md
- For supplier audit checklists, see
references/supplier-audit.md
1---2name: mfg-supplier-scorecard3description: "Evaluate and manage suppliers using weighted scorecards across quality, delivery, price, and service dimensions. Use this skill when the user needs to assess supplier performance, compare vendors for selection, design a supplier rating system, or manage supplier development — even if they say 'which supplier should we choose', 'rate our vendors', 'this supplier keeps delivering late', or 'build a vendor evaluation system'.".4---56# Supplier Scorecard78## Framework910```11IRON LAW: Evaluate on QCDS (Quality, Cost, Delivery, Service) — Not Just Price1213The cheapest supplier who delivers defective parts late with no support14is the most expensive supplier. Total Cost of Ownership (TCO) includes:15purchase price + incoming inspection + rework + downtime from defects +16expediting fees + management overhead.1718NEVER select suppliers on price alone.19```2021### Four Evaluation Dimensions (QCDS)2223| Dimension | Weight (typical) | KPIs |24|-----------|-----------------|------|25| **Quality** | 30-40% | Defect rate (PPM), incoming inspection pass rate, certifications (ISO 9001), corrective action responsiveness |26| **Cost** | 20-30% | Unit price, total cost of ownership, price stability, payment terms |27| **Delivery** | 20-30% | On-time delivery rate, lead time, lead time variability, flexibility for rush orders |28| **Service** | 10-20% | Responsiveness, communication quality, technical support, willingness to collaborate on improvements |2930### Scoring Method31321. **Define KPIs** per dimension (2-3 per dimension)332. **Set weights** (must sum to 100%)343. **Score each KPI**: 1-5 scale with clear definitions:35 - 5 = Excellent (top 10% of suppliers)36 - 4 = Good (meets all requirements consistently)37 - 3 = Acceptable (meets most requirements)38 - 2 = Below expectations (frequent issues)39 - 1 = Unacceptable (critical problems)404. **Calculate weighted total**415. **Classify**: A (>4.0), B (3.0-4.0), C (2.0-3.0), D (<2.0)4243### Supplier Classification & Actions4445| Grade | Score | Strategy |46|-------|-------|---------|47| **A** | >4.0 | Preferred supplier, increase business, joint development |48| **B** | 3.0-4.0 | Approved supplier, maintain, targeted improvement |49| **C** | 2.0-3.0 | Conditional, improvement plan required within 90 days |50| **D** | <2.0 | Phase out, begin alternative sourcing immediately |5152### Risk Assessment5354| Risk Factor | Question | Mitigation |55|-------------|---------|-----------|56| **Single source** | Is this supplier the only source for a critical component? | Develop backup supplier |57| **Geographic** | Is the supplier in a region prone to disruption? | Dual-source across regions |58| **Financial** | Is the supplier financially stable? | Monitor credit, require financial disclosures |59| **Capacity** | Can the supplier scale with our growth? | Capacity commitment agreements |60| **IP** | Does the supplier have access to our proprietary designs? | NDA + IP clauses in contract |6162### Supplier Development Program (SDP)6364For C-grade suppliers worth keeping:651. **Gap analysis**: Where specifically are they falling short?662. **Improvement plan**: Specific, measurable, time-bound targets673. **Support**: Provide training, share best practices, co-invest if needed684. **Review**: Monthly progress checks, 90-day formal reassessment695. **Decision**: Improved to B+ → continue. Still C or worse → phase out.7071## Output Format7273```markdown74# Supplier Scorecard: {Supplier Name}7576## Overall Score: {X.X} / 5.0 — Grade: {A/B/C/D}7778## Detailed Scores79| Dimension | Weight | Score | Weighted |80|-----------|--------|-------|---------|81| Quality | {%} | {X.X} | {X.XX} |82| Cost | {%} | {X.X} | {X.XX} |83| Delivery | {%} | {X.X} | {X.XX} |84| Service | {%} | {X.X} | {X.XX} |85| **Total** | **100%** | — | **{X.XX}** |8687## KPI Details88| KPI | Target | Actual | Score |89|-----|--------|--------|-------|90| Defect rate | <500 PPM | {X} PPM | {1-5} |91| On-time delivery | >95% | {%} | {1-5} |92| ... | ... | ... | ... |9394## Risk Assessment95| Risk | Level | Mitigation |96|------|-------|-----------|97| {risk} | H/M/L | {action} |9899## Action Plan100{Based on grade: preferred/maintain/improve/phase out}101```102103## Gotchas104105- **Weighting should reflect YOUR priorities**: A medical device company should weight Quality at 50%+. A commodity buyer might weight Cost at 40%. Don't use generic weights.106- **Score inflation**: Purchasing teams may inflate scores to avoid difficult conversations with suppliers. Require data-backed evidence for each score.107- **Review frequency**: A-grade quarterly, B/C-grade monthly, D-grade weekly until resolved.108- **Supplier relationship matters**: Scorecards are tools for improvement, not punishment. Share results with suppliers transparently — the best suppliers want feedback.109- **TCO includes hidden costs**: Don't forget: incoming inspection labor, warehouse space for safety stock (to cover unreliable delivery), engineering time for quality issues, customs/logistics for overseas suppliers.110111## References112113- For TCO calculation methodology, see `references/tco-calculation.md`114- For supplier audit checklists, see `references/supplier-audit.md`
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