A supplier scorecard translates supplier performance into a single record that procurement, engineering, and quality can act on together. Done right, it is the primary tool for moving business between suppliers and for prioritizing development effort. See the broader supplier quality guide for where scorecards sit in the program.
What scorecards are for
A scorecard has three jobs: tell the supplier exactly where they stand, give procurement objective evidence for business-allocation decisions, and tell supplier quality where to spend development effort. If the scorecard does not drive at least one of those decisions, it is overhead.
Common mistake: building a scorecard with 20+ metrics, none of which has a consequence attached. Suppliers ignore it, internal teams stop updating it, and within a year it stops being run.
Metrics that matter
Five to seven metrics are usually enough. The standard set:
- Defective PPM — defective parts per million. (defective units / total units received) × 1,000,000. Reported monthly, rolled quarterly. The single most-watched metric in almost every supplier quality program.
- On-time delivery (OTD) — percentage of lines received within the agreed delivery window. Should track both early and late as separate failures; suppliers shipping consistently early are not "good" — they are inflating customer inventory.
- SCAR response time — average days from issue to acceptance, broken into the 8D stages (containment, root cause, plan, effectiveness).
- SCAR response quality — percentage of SCAR responses accepted on first submission. Often more predictive of long-term performance than PPM.
- PPAP / FAI first-pass yield — percentage of submissions accepted without rework. A leading indicator of new-part performance.
- Audit findings — number of open major and minor findings from the most recent audit, weighted by severity.
- Escape rate — defects per million that made it past incoming inspection into production or to the end customer. Trickier to measure than PPM but more useful.
Weighting
A typical weighting for a manufacturing or aerospace program:
- PPM — 30%
- OTD — 20%
- SCAR response (time + quality) — 20%
- PPAP/FAI first-pass yield — 10%
- Audit findings — 10%
- Escape rate — 10%
Adjust for the program's strategic priorities. A safety-critical aerospace program might push audit findings to 20% and PPM to 20%. An electronics contract manufacturer with stable suppliers might push OTD to 30%.
Tiering
Compute the weighted score, then map to tiers. A common three-tier system:
- Tier A (Preferred) — 90-100. Performance meets all targets, no chronic issues.
- Tier B (Approved) — 75-89. Generally acceptable, isolated issues, development opportunities identified.
- Tier C (Controlled) — below 75. Chronic issues, formal development plan required, business hold considered.
Tier consequences
A tier with no consequence is a label, not a scorecard. Typical consequences:
- Tier A — preferred for new business, reduced incoming inspection (skip-lot or dock-to-stock), longer contract terms, lower audit frequency.
- Tier B — standard incoming inspection, normal audit cycle, quarterly business review, development opportunities discussed.
- Tier C — 100% incoming inspection, monthly business review, formal development plan with exit criteria, no new business allocated, controlled shipping if escapes continue, re-sourcing planned if performance does not recover within an agreed window.
Cadence and review
Most programs run a monthly internal scorecard update and a quarterly Business Review meeting with the supplier. Tier A and B suppliers attend quarterly; Tier C suppliers attend monthly with the formal development plan as the agenda. Top 10 suppliers (by spend or risk) often warrant a separate executive-level review annually.
Pitfalls
- Measuring PPM only — misses response quality, which is more predictive of long-term performance.
- Treating early delivery as on-time — masks supplier planning issues and inflates customer inventory.
- Letting Tier C suppliers stay Tier C without exit criteria — accountability without consequence stops driving change.
- Scoring without consequence — suppliers stop reading the scorecard.
- Too many metrics — when everything matters, nothing does.
For the SCAR data that feeds the response metrics, see the SCAR process guide and the SCAR template guide. For audit findings, see the supplier audit checklist.