Partner With Your Vendor Using a Comprehensive ScorecardNovember 13, 2017
One of the top sourcing priorities for brands and retailers today is making it a priority to onboard their vendors quickly and build strong vendor relationships based on transparency, trust and high-performance. Vendor report cards are a cornerstone of a vendor compliance strategy by ensuring that a good relationship is formed and that vendors adhere to retailers’ standards and codes of conduct.
In today’s quick turn business, vendors are often forced to cut lead times by taking risky shortcuts that can lead to costly issues. As brands and retailers rush to hit calendar responsibilities, problems like forced overtime at the factory, unauthorized subcontracting, and not having enough time to make critical decisions become frequent. Vendor report cards can help head off these issues by holding vendors accountable and taking action to correct any non-compliance issues.
What goes into a vendor report card
Vendor report cards include several items that are useful to objectively assess and evaluate vendors, including:
- Specific information on the vendor – financial measurements, replenishment rates, in stock percentage, gross margin dollars, return on investment, etc.
- A holistic scorecard – on-time deliveries, completion rate, sample approvals, average number of samples before color approval, performance testing, etc.
- Outgoing quality rating – units audited, the percentage of defective materials, etc.
- Tracked information on chargebacks – EDI compliance, reasons for chargebacks, etc.
- Individual preferences - languages, suggestions for product development, etc.
By setting clear expectations and taking objective measurements of how the vendor is performing, a comprehensive report card serves as the backbone of effective vendor compliance.
A 360-degree review
Using the report card, it’s important to do a 360-degree review with the vendor to talk about how to assess issues and create an ongoing win-win relationship. Not only does a review help keep vendors on track, but it also sets clear expectations for the future.
The key is to sit down and talk about how both sides can improve and create a corrective action plan to do so. This is not only a review of the vendor, but vendors also need to score the retailer as well, with questions like “Is your team meeting deadlines?” and “Do you make your vendors rush and take shortcuts?” Honest, two-way communication is necessary to get a complete view of the retailer-vendor relationship.
Andromeda Vendor Compliance offers scorecard capabilities
NGC’s Andromeda Vendor Compliance solutions can help with this review process by generating a report based upon current performance metrics. It is unique in its ability to onboard vendors, set expectations and create a collaborative relationship.
Andromeda Vendor Compliance includes a calendar-driven, status-driven ability to require forms that, based on the stage of onboarding, opens up automatically and takes brands, retailers and vendors through each step of the process. It also includes a tablet application that allows factories to do self-audits for social compliance. When Corrective Action Plans are required, the system automatically generates a notification, and vendors can submit their plan and take photos to show that any areas of non-compliance have been corrected.