Supplier quality metrics serve three audiences: the supplier (who needs to know exactly where they stand), procurement (who needs evidence for business-allocation decisions), and supplier quality (who needs to know where to spend development effort). See the broader supplier quality guide for context.
Principles before metrics
- Five to seven metrics is enough. More dilutes attention.
- Every metric needs a target, a data source, and an owner.
- Every metric needs a consequence — a tier change, a SCAR, a business hold.
- Metrics that the supplier cannot influence (customer-side problems) do not belong on the supplier scorecard.
- The rollup interval is monthly; the review interval is quarterly.
Defective PPM
Formula: (defective units received / total units received) × 1,000,000, rolled monthly. Defective is units rejected at incoming inspection or detected in process and traced back to the supplier.
Targets: Best-in-class automotive runs below 50 PPM. Aerospace targets are commonly below 10 PPM for production-intent characteristics. Electronics CMs often segment by commodity — passives below 100 PPM, complex assemblies below 500.
Blind spots: PPM is a lagging measure. A supplier with a process drifting toward an out-of-spec condition shows zero PPM right up until the day it crosses the limit. Pair PPM with SCAR response quality and audit findings.
On-time delivery (OTD)
Formula: (lines received within the agreed window / total lines received) × 100. The window is the customer's, not the supplier's — typically -0 / +3 days from confirmed dock date.
Targets: 95% for general manufacturing, 98%+ for automotive Tier 1 and aerospace. Worth segmenting by line type (A-parts vs B-parts) because expedites mask real OTD.
Blind spots: Counting early as "on time" hides supplier planning problems and inflates customer inventory. Treat early outside the window as a failure too.
SCAR response — time and quality
Two sub-metrics, both matter.
- SCAR response time — average days from issue to acceptance, broken down by 8D stage (containment, root cause, plan, effectiveness). Target: containment within 48 hours, root cause within 14 days, plan within 30 days.
- SCAR first-pass acceptance rate — percentage of supplier responses accepted without rejection. Target: above 80%. Below 60% is a development trigger.
See the supplier corrective action process for what drives these numbers and the SCAR template for the structure suppliers respond against.
PPAP / FAI first-pass yield
Formula: (submissions accepted on first review / total submissions) × 100, rolled quarterly. Counts PPAP (AIAG, automotive) or FAI per AS9102 (aerospace).
Targets: 80%+ is workable, above 90% is strong. A supplier whose PPAPs consistently come back with open issues will produce parts whose CAPAs consistently come back with weak root causes — the patterns correlate.
Blind spots: Counts only the submissions that were made. Suppliers who delay submissions to clean them up first look better than suppliers who submit on time and iterate — but the late submitter is the actual risk. Track submission timeliness separately.
Audit findings
Formula: weighted count of open findings from the most recent supplier audit. Common weighting: major = 5 points, minor = 2 points, observation = 1 point.
Targets: Zero open majors. No more than 5 weighted points carried forward from the previous audit. Findings should close before the next audit, not be carried indefinitely.
See supplier audit checklist for the audit structure that produces these findings.
Escape rate
Formula: (defects from this supplier reaching production or the end customer / total units received) × 1,000,000. Different from PPM because PPM counts incoming rejects; escape rate counts what got past incoming.
Targets: Below 5 PPM escape for automotive, below 1 PPM for aerospace. Even one safety-related escape is usually a Level 3 escalation regardless of the average.
Blind spots: Harder to attribute than PPM (a defect found in field can be ambiguous). Worth tracking but with disciplined attribution rules.
Rolling up to a tier
A typical weighting for the composite score that drives tier (A/B/C):
- PPM — 30%
- OTD — 20%
- SCAR response (time + quality) — 20%
- PPAP / FAI yield — 10%
- Audit findings — 10%
- Escape rate — 10%
Adjust for industry. Safety-critical aerospace often pushes audit findings to 20%; high-volume electronics often pushes OTD to 30%. See the supplier scorecard example for a worked rollup.
FAQ
What is PPM in supplier quality?
PPM is defective parts per million: (defective units / total units received) × 1,000,000. Reported monthly, rolled quarterly. Best-in-class automotive runs below 50; aerospace often targets below 10.
How do you measure supplier OTD correctly?
Count both early and late shipments outside the agreed window as failures. Consistent early delivery inflates customer inventory and masks supplier planning issues — counting it as "on time" hides real problems.
Which supplier quality metric is most predictive?
SCAR response quality (first-pass acceptance rate) is often more predictive of long-term performance than PPM alone — a supplier whose investigations are weak will keep producing issues that need investigating.
How often should a supplier scorecard be reviewed?
Internally monthly, with the supplier quarterly. Tier C suppliers move to monthly review with the formal development plan as the agenda.
Download the SCAR Template
The SCAR data feeds two of the most important scorecard metrics.
Get the SCAR template