Supplier scorecard: KPIs, weights and A / B / C classes
How to build a supplier scorecard that suppliers accept: which KPIs to use, how to turn PPM, on-time delivery and 8D speed into points, weights, classes and a monthly one-page report, with a worked example.
What a supplier scorecard is for
A supplier scorecard turns delivery and quality data into one score and a class per supplier every month. It is the basis for the monthly review with the supplier, for sourcing decisions and for escalation. IATF 16949 clause 8.4.2.4 asks for supplier performance monitoring with at least delivered product quality, customer disruptions, delivery schedule performance and premium freight; a scorecard covers these in one place.
The six KPIs that work
| KPI | How it is measured | Typical A limit / B limit |
|---|---|---|
| PPM | Rejected parts ÷ received parts × 1,000,000 | ≤ 50 / ≤ 250 |
| On-time delivery | Deliveries on time and complete ÷ deliveries due | ≥ 98 % / ≥ 92 % |
| Complaints per month | Official complaints (SCAR) in the period ÷ months | 0 / ≤ 1 |
| Containment time (D3) | Days from complaint to containment in place | ≤ 1 / ≤ 3 days |
| 8D closure time (D8) | Days from complaint to 8D closed | ≤ 30 / ≤ 60 days |
| Quality cost per month | Sorting, rework, scrap and administration charged to the supplier | 0 / ≤ 1,500 |
From KPI to points
Give each KPI points by band instead of a continuous formula: 100 points when it meets the A limit, 60 when it meets the B limit, 20 below. Bands are easy to explain to a supplier and stop arguments about the third decimal. A month without deliveries should not count as perfect: leave the KPI empty and let the weights of the other KPIs carry the score.
Weights and classes
- Quality first: PPM 30 %, complaints 15 %, D3 15 %, D8 10 %.
- Delivery: on-time delivery 25 %.
- Cost: quality cost 5 %.
- Score = Σ points × weight. Class A from 85, B from 65, C below.
- Switch a KPI off by setting its weight to 0 % and re-balance the others to 100 %.
Worked example
| KPI | YTD value | Rating | Points × weight |
|---|---|---|---|
| PPM | 847 | C (above 250) | 20 × 30 % = 6.0 |
| On-time delivery | 92.4 % | B | 60 × 25 % = 15.0 |
| Complaints / month | 2.3 | C | 20 × 15 % = 3.0 |
| D3 days | 4.3 | C | 20 × 15 % = 3.0 |
| D8 days | 54.8 | B | 60 × 10 % = 6.0 |
| Quality cost / month | 2,890 | C | 20 × 5 % = 1.0 |
| Total | Class C | 34.0 |
What each class triggers
- A: preferred supplier, eligible for new business, reduced incoming inspection.
- B: improvement plan for the KPIs below the A limit, reviewed monthly.
- C: escalation, quality meeting with the supplier management, increased inspection or controlled shipping, no new business until back to B.
Make it fair and repeatable
- Agree the definitions in the supplier quality agreement: which rejects count, the delivery window, when the D3 / D8 clock starts.
- Send the one-page scorecard every month, not once a year.
- Rank all suppliers for the same period so the review focuses on the worst ten.
- Keep the raw logs (receipts, deliveries, complaints): the score must be traceable to records.
Written by Ľubomír Blažek, process quality team leader, automotive. Standards are summarised in our own words; use the official publications for formal work.