Santosh Noone

Date of Award

12-2007

Document Type

Independent Study

Degree Name

Master of Science in Industrial Engineering (MSIE)

Abstract

The new trends of global competition, heightened customer expectations, and harsh economic conditions suggest that future competitiveness will be determined by a company's ability to develop strategies to optimally align and manage an extended network of supplier relationships. To remain in competition every company needs to attract and retain high-caliber suppliers. To accomplish this, firms must accurately evaluate vendor performance and must work with their suppliers to improve areas of weakness.

Scorecards are the matrix system that is used by most companies today to evaluate their supply base. These matrix systems evaluate the suppliers based on various performance factors and rate them accordingly. The scorecards usually provide points for all the factors considered and overall is presented a cumulative score representing the total performance of a supplier. This is an ideal way of evaluating suppliers for benchmarking and leveraging their performance in order to meet the customer company's demands. Two scorecards were compared for effectiveness and accuracy in six (6) different areas. In addition, the research explored the two scorecards for the design of scorecards, factors considered towards scorecards, point system-the pros and cons of it and provides recommendations to improve the current scorecard systems.

A tier 1 aerospace company in the Midwestern region was facing a challenge in creating an efficient supplier evaluation system that can be used to leverage their supplier's performance and to internally help the company in making the best supply chain decisions. This need required the supplier development team of the company to develop an efficient scorecard system by making changes to its old scorecard system. By overcoming various problems in the old scorecard system the supplier development team successfully created a scorecard that best matches their supply chain demands. This study was conducted to determine the effectiveness of the new scorecard system over the old scorecard system. The conclusions reached determined that the effectiveness based on six (6) different areas for a newly designed scorecard was greeter than for the previous scorecard system.

Download

Share

COinS