Consequences for Poor Performance based on a Monthly Scorecard - Actions?

zagwyn

Involved In Discussions
#1
I would like some ideas from the group regarding the consquences which should occur for poor performance based on a monthly scorecard consisting of quality and delivery for appoximately 25 critical suppliers of PWBAs and metal enclosures. I also would like to know how you would address if the poor rating is based on either quality or delivery how would you treat one versus the other. Thank you.:frust:
 
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pondo

Registered Visitor
#2
Re: consquences for poor performance based on a monthly scorecard

Catalog from most worst to least worst.

Catalog from greatest to least impact on you and your customers.

Prioritize.

Request root cause and corrective action.

De-source if they do not deliver.

If you are Wes, fly first class to your supplier, take everyone out to dinner. (Out of your own pocket) The spoon feed them what they need to do to improve. If they don't deliver fly back out and spoon feed them some more.

Delivery and quality equal in the affect on customer satisfaction.
 

Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#3
Re: consquences for poor performance based on a monthly scorecard

If you are Wes, fly first class to your supplier, take everyone out to dinner. (Out of your own pocket) The spoon feed them what they need to do to improve. If they don't deliver fly back out and spoon feed them some more.
Whaaaat? :mg:

I would like to add (to the serious part) to be quite sure that the contract, instructions and communication lines with these suppliers are all quite clear. (Before going to the expense and effort of resourcing, wouldn't it be nice to rule out all the problem sources that you can control in-house?)
 

zagwyn

Involved In Discussions
#4
I am more interested in punitive such as charge backs, probation, etc... Please let me know how others handle poor supplier quality besides the corrective action process-which I do use- or disqualifying. What types of things do you find cause the supplier to react positive. BTW we are low volume high revenue business. So we may not be the top customer of a supplier and unfortunately many supplier take the attitude they can live without our business.
 

BradM

Staff member
Admin
#5
I would like some ideas from the group regarding the consquences which should occur for poor performance based on a monthly scorecard consisting of quality and delivery for appoximately 25 critical suppliers of PWBAs and metal enclosures. I also would like to know how you would address if the poor rating is based on either quality or delivery how would you treat one versus the other. Thank you.:frust:
Interesting notion. Some questions for you...

1. You state they have poor performance. Against what basis are you making that assessment? Set aside the scorecards-is there truly a problem? What is the problem? How do you propose to make it better?

2. How many different vendors do you have to choose? Are these relationships ones you will need to manage, or do you have other suppliers?

Someone made the suggestion (it's a really good one) to develop communication and improvements with a supplier. Suppliers are not icebergs out in an ocean; they are living, breathing people with an interest to gain more business. Sometimes developing a good relationship with a supplier may take some effort and communication. No good relationship is developed without time and effort (mentioned in a previous post), whether you want to invest that time and effort is your call to make.

Taking some time to visit and talk with the supplier may yield solutions that you had not even thought of. As wisely mentioned before, yes, take them out to dinner. That shows that you truly care about the relationship. That vendor will have a completely different perspective of you as the customer when you leave.

As for the trade-off of quality and delivery: again, that will depend upon your value system and what is important in your organization. One may be more critical than another.
 

BradM

Staff member
Admin
#6
I am more interested in punitive such as charge backs, probation, etc... Please let me know how others handle poor supplier quality besides the corrective action process-which I do use- or disqualifying. What types of things do you find cause the supplier to react positive. BTW we are low volume high revenue business. So we may not be the top customer of a supplier and unfortunately many supplier take the attitude they can live without our business.
I know there are many who seek such approaches. However, I am not a fan of punishment of a supplier. I just watched Mutiny On The Bounty the other night. Captain Bligh (a very talented seagoing captain) felt discipline was the key to running the ship. However, there seemed to be a whole of discipline, without any understanding of the situation or the circumstances. In the end, whether he was right or not became largely irrelevant when he was kicked off his own ship by Clark Gable and the other Mutineers(sp?)!:D

In my humble opinion, I would make decent contact with the customer and talk to the person in charge of your account. If you can call a meeting with that person, the better. Talk with them about your account. Are you sure you have all the information? Maybe you are a late pay. Maybe you have not established consistent quality testing approaches and you're failing a lot of products they don't think is a failure. I don't know a lot of the specifics to your situation, but it seems to me that I would want to find out a lot more information about exactly what the problem is before I started dishing out punishment.
 
#7
I am more interested in punitive such as charge backs, probation, etc... Please let me know how others handle poor supplier quality besides the corrective action process-which I do use- or disqualifying. What types of things do you find cause the supplier to react positive. BTW we are low volume high revenue business. So we may not be the top customer of a supplier and unfortunately many supplier take the attitude they can live without our business.
I will say that while there is a world of a difference between the situations big supplier vs. small customer and small supplier vs. big customer, cooperation should be sought. Punishment does not promote cooperation.

/Claes
 

Kales Veggie

People: The Vital Few
#8
Do yo have a supplier development function within your company? Chronic suppliers should be approached for a quality and delivery improvement project to find root cause of their chronic poor performance. For this to be a success, you will need buy-in from both your upper management and the upper management at your supplier. I am currently involved in a project with a client addressing a similar problem.

Also consider risk. Some suppliers could be easily resourced. Others are not or with only high cost and high risk. (in your case, it might be easy to find another stamping house, but almost impossible to find replacement for a custom designed chip).

Claes makes a good point about size. Depending on your size, you might have almost no influence with a large supplier. You will have to adjust your strategey.

One more thing. Does your company charge your supplier for the cost involved with quality (e.g. sorting cost, floor space) and delivery (e.g. expedite cost. line down time) issues? This could help some of your suppliers realize the cost of poor quality at their customer.
 

Jen Kirley

Quality and Auditing Expert
Staff member
Admin
#9
Such good responses. :applause:

It's true that supplier quality can be problematic. But this remark seems key to me:
So we may not be the top customer of a supplier and unfortunately many supplier take the attitude they can live without our business.
How well they respond to your punishment directly correlates with how badly they think they need to sell to you. If they decide your approach is not worth the sales, you won't improve discipline--you will find yourself looking for a new supplier.
 
P

Phil Fields

#10
I am more interested in punitive such as charge backs, probation, etc... Please let me know how others handle poor supplier quality besides the corrective action process-which I do use- or disqualifying. What types of things do you find cause the supplier to react positive. BTW we are low volume high revenue business. So we may not be the top customer of a supplier and unfortunately many supplier take the attitude they can live without our business.
Be cautious when looking at punitive charge backs. I have worked for two companies like yours, On Time Delivery always looked bad. The supplier’s delivery was not bad, it was the receiving function not always receiving the product on the day it entered the building. If the supplier delivered product on the day it was due, it may not have been received until a day or two later, thus giving us false information.

Also are you giving the suppliers monthly reports of their performance? I have been in situations where the supplier had no idea that their customers viewed them as a poor performer since they did not get feedback. Once the supplier stated to get feedback the performance improved.

Try working with the suppliers 1st before the punishment system.

Phil
 
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