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

C

Craig H.

#11
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
There are some good responses here, but this one strikes close to my home (my situation). We have a large customer who routinely charges us for damage caused by the shipper that they choose, and they contract with, on loads that are FOB (Free On Board, our loading dock). When I say charge, actually they will short pay an invoice (often paid late, and not the invoice that is for the load in question). The only times we have challenged them, it has taken about 3 months to get an answer, and longer than that to get our money back. We also see "late" shipments that left our plant on the scheduled date.

When this particular company started their supplier disgruntlement program, they openly stated in the roll out letter that it was for "cost recovery" because they found that their suppliers were costing them money.

Wanna ask me what I think of this company and their program? Well, I forbid any of their products on my land or in my house, for one thing.
 
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U

Umang Vidyarthi

#12
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.
Prima-facie, it appears, perhaps you do not have supplier/vendor development program. You have to educate the vendor about your requirements, and why are these necessary for you. What may happen if these are not met. More importantly, you have to press the point home that, by working systematically they have every thing to gain, like less rejections, more customers etc. Simply saying:Such and such has to be done, since it is an ISO/TS requirement, does not fetch water. The non-educated vendors will simply show their back to you.

IMO, Punitive actions, pecuniary in particular, are a taboo. You implement them only to loose your vendor(s).

....many supplier take the attitude they can live without our business.

You are dead right. Business will transact (long term), only when both the parties need it. Need has to be mutual, one way does not last for long.

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:
Could you please rephrase your query.

/Umang :D
 
G

Geoff Withnell

#13
Also, Please make sure that if you are looking at one month's results, that you are not looking at just a random fluctuation in an otherwise stable situation, or a special cause situation that may bbe outside of the suppliers' ability to prevent or correct. Supplier results should be review for statistical stability just as internal process results would be.

Geoff Withnell
 

zagwyn

Involved In Discussions
#14
Thanks all-many great ideas-the punitive idea was based on recouping costs from copq-rework performed because we did not have the luxury of returning parts for rework-shipping charges-penalties incurred because we did not meet ship dates to customers-lost produtivity due to line shutdown. How do you address these costs?
 

pondo

Registered Visitor
#15
Thanks all-many great ideas-the punitive idea was based on recouping costs from copq-rework performed because we did not have the luxury of returning parts for rework-shipping charges-penalties incurred because we did not meet ship dates to customers-lost produtivity due to line shutdown. How do you address these costs?
Charge your supplier for every cost associated with their nonconformance.

Man hours visiting your customer,
man hours spent at your supplier,
man hours segregating, reworking, by your company,
travel costs, down time costs from your customer,
your plant's downtime incurred, etc, etc

This IS NOT being punitive. It is cost RECOVERY.

By the time you add up these costs, the idea of coddling your supplier and having soft and cuddly relationships with them is not all that attractive.

Does not mean that you have a bad relationship with supplier, rather a fair and equally benefiting relationship.
 

Stijloor

Staff member
Super Moderator
#16
Charge your supplier for every cost associated with their nonconformance.

Man hours visiting your customer,
man hours spent at your supplier,
man hours segregating, reworking, by your company,
travel costs, down time costs from your customer,
your plant's downtime incurred, etc, etc

This IS NOT being punitive. It is cost RECOVERY.

By the time you add up these costs, the idea of coddling your supplier and having soft and cuddly relationships with them is not all that attractive.

Does not mean that you have a bad relationship with supplier, rather a fair and equally benefiting relationship.
These cost (recovery) factors should be communicated and agreed upon at the contract review stage. The supplier has the right to know what the (monetary) consequences are for bad behavior prior to any contractual (P.O.) agreement. But if you're a small (customer) fish in a large (supplier) pond? Good luck!

Stijloor.
 
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