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Theory: four KPIs, one score
A scorecard turns supplier performance into facts that purchasing, logistics and quality agree on. The four criteria cover what the receiving plant feels: defective parts, late or premium deliveries, the number of complaints and how fast the supplier reacts.
Each KPI is scored 0 to 100 against its target and combined with weights, for example 40 % quality, 30 % delivery, 15 % complaints, 15 % responsiveness. Class A from 85 points, B from 70, C below 70.
Key point
Step by step
- Collect the data from the ERP: goods receipts, rejection notifications, delivery dates against the call-off, complaint log and 8D response dates.
- Enter one row per supplier and month in the scorecard, or paste the export from Excel.
- Check the ranking to see which suppliers need attention first.
- Send the PDF to the supplier before the review meeting, with the weakest area named.
- Act: class B gets an agreed improvement plan, class C enters escalation, class A can move to reduced incoming inspection.
Example: three suppliers, six months
A plant rates a machining supplier, a plastics supplier and a rubber supplier. The plastics supplier scores 100 (class A) with 19 PPM and full on-time delivery. The machining supplier reaches 71 (class B) after two bad months with 300 to 650 PPM and late 8D answers. The rubber supplier scores 28 (class C) with about 3 900 PPM, 7 complaints and repeated premium freight. The rubber supplier is put on controlled shipping and asked for an 8D, the machining supplier agrees a monthly review of its improvement plan.
Common mistakes
- Counting only incoming-inspection rejects and missing the ones found in production or at the customer.
- Changing weights or targets every quarter, so trends cannot be compared.
- Rating small suppliers on PPM with tiny volumes; one reject in 200 parts is 5 000 PPM. Use complaints instead.
- Sharing the score without the underlying data, which turns the meeting into a discussion about numbers.
Frequently asked questions
How is supplier PPM calculated?
Rejected parts divided by received parts, times one million, for the same period. Count parts rejected at incoming inspection, in production and at the customer if they were caused by the supplier.
Why a logarithmic quality score?
PPM values span several orders of magnitude. A log scale treats 100 vs 50 PPM like 1000 vs 500 PPM, so one bad month does not drive the score to zero while repeated problems still pull it down clearly.
How often should a scorecard be shared?
Monthly for key and problem suppliers, quarterly for the rest, and always before a supplier review meeting.