Development of the KPI Scorecard for supplier assessment

Abstract

Purchasing activities are a very important part of the supply chain and crucial for the financial performance and logistics of a business organization. Today, many organization are facing challenges in the proper implementation of the purchasing processes. One of these challenges is to provide an adequate selection of suppliers, who delivers materials or services from external resources. Indeed, the selection of a supplier is an important process, and it is very crucial to implement this process in a proper way. For example, the bad performance of a supplier might seriously influence the performance of the organization as well if they are not able to a deliver products, materials or components on time or deliver wrong amount of them. In order to avoid such situations, there are ways to evaluate suppliers and their performance. One of these ways is to use KPI (key performance indicator) Scorecards, which will sum up the required information about a supplier and help to analyse its performance with more solid evidences.