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About the Author

Greg Holder
Chief Executive Officer and Founder
Compliance Networks LLC


Mr. Greg Holder serves as Chief Executive Officer of Compliance Networks LLC. Mr. Holder served as Distribution Center Director of the 800k sq ft. Worth DC at Dillard’s, Inc., where he served for the next 8 years. He spent two years at Stage Stores Inc., where he served as Director of Logistics. Mr. Holder graduated with a Bachelor's Degree in Industrial Engineering from the University of Oklahoma.

For more information, please visit http://www.compliancenetworks.com
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Supply Chain Comment

By Greg Holder, Chief Executive Officer and Founder, Compliance Networks LLC

October 11, 2012



If We Only Had a Vendor Scorecard...

The First Question one Needs to Consider when Thinking about Scorecards is What is the Goal of the Scorecard?


Time and time again, I hear stories that vendor performance would improve "if we only had a vendor scorecard." Well, I disagree on three points. First, I would argue that most individuals already have vendor scorecards – they just don't call them vendor scorecards. Second, improvements will not magically happen because a company starts sharing performance history to stakeholders. There needs to be some motivation to drive real change. And finally, you can't wait until you have a scorecard; you need to start doing something right now. Get out of the excuse business and start something today. So, let's get started.

I think the first question one needs to consider when thinking about scorecards is what is the goal of the scorecard? "To improve performance." Great, what does that really mean? Companies or departments need to be very specific. Most retailers have vendor requirements (and I would hope that most vendors have similar requirements for their factories or other sources) that help facilitate flow in the supply chain. This is a great place to start. By understanding these requirements a company can create an audit to start collecting fact-based (versus anecdotal, conventional wisdom, rumor, or myth-based) information about adherence to the requirements. Many companies may already have something in place. Getting this data out in a report by vendor or factory is an example of a vendor scorecard. Sharing it internally with stakeholders and externally with the vendors or factories is a very important step.

So, I think one of the first concepts we should accept is that a scorecard does not have to contain every metric, consist of weighted averages and fancy math to determine a grade to be effective. Simple things that convey performance over a specified period of time is a very good start. Other things to think about are:

Holder Says:

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I think one of the first concepts we should accept is that a scorecard does not have to contain every metric, consist of weighted averages and fancy math to determine a grade to be effective.
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1. The data needs to be relevant and easy to understand. Why would accounts receivable clerks care about late shipping or the percentage of units mis-ticketed? This scorecard needs to get to the warehouse management.

2. The data needs to be timely and current. Telling me about poor shipping performance six months ago does nothing to help me now. Telling me now about a shipping failure that just occurred gives me the best possible opportunity to address the cause of the failure before it happens again.

3. The data should be frequent. I'm a big believer in producing accurate data on a monthly basis when presenting a summarized 50,000 feet view. Providing me with aggregated performance data on a regular and frequent basis enables me to see trends in performance, so I can focus on performance areas that are most important and most in need of attention.

I guess I would like to leave you with this. You have relevant data that can be put together to create a scorecard. Start doing it. If you have only a piece of the pie, it is a great place to start. Even if you do not think you are in a position to start sharing your data, start with a few test companies. You and they will be glad you did.

I'm often reminded of a couple of questions I heard years ago (but can't recall from whom) that are very relevant here:


Question 1: When is the best time to plant an oak tree? Answer: 25 years ago

Question 2: When is the second best time to plant an oak tree? Answer: right now

It's time to plant.
 

Recent Feedback

Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.


Srihari
Senior Consultant
Infosys
May, 22 2016

Surprised to see Home Depot fall off the list; thought they were winning with Sync?


Mike O'Brien
Senior editor
Access Intelligence
May, 26 2016

Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.


Julie Leonard
Marketing Director
Inovity
Jun, 27 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 


Carsten Baumann
Strategic Alliance Manager
Schneider Electric
Aug, 19 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".






Jo Ann Tudtud-Navalta
Materials Management Manager
Chong Hua Hospital, Cebu City, Philippines
Aug, 21 2016

U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm


Sandy Montalbano
Consultant
Reshoring Initiative
Aug, 24 2016

 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!


Robert
Transportation Manager
N/A
Aug, 30 2016

SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.


Ian Jansen
Mr
NHLS
Sep, 14 2016

Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 


Don Benson
Partner
Warehouse Coach
Sep, 15 2016

Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.


Jade
Admin
Fulfillment Logistics UK Ltd
Oct, 02 2016

Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.


Mike Dargis
President of asset-based carrier based in the Midwest
Zip Xpress Inc. (at ZipXpress.net)
Oct, 03 2016

Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com


Blaine
Inventory Specialist
Syncron
Nov, 16 2016

This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 


Bob McIntyre
National Account Executive
DBK Concepts LLC
Nov, 21 2016
 
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