Metalcraft Supplier Scorecard.docx - Assignment-Metalcraft...

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Assignment-Metalcraft Supplier Scorecard 1.What is the ostensible purpose of the supplier scorecard at Metalcraft? Is it achieving this goal? The objective of the supplier scorecard at Metalcraft’s was to choose a supplier that produced partswith least defect rate. The challenge for the Automobile Original Equipment Manufacturers (OEMs)was to cut down warranty costs, through targeting Zero defect rates from Tier 1 suppliers. It can beobserved from the case that the Management of Automakers wanted high quality products to cutdown the warranty costs they experienced in the market. This led to an increased focus on theupstream segment of the OEMs, because each of their supplier’s performance could have an impacton the Automakers’ final products. Metalcraft, being the Tier 1 supplier had to meet theseexpectations of producing products with low defect rate and in turn, needed to streamline theirCommodity sourcing. The goal of the supplier scorecard is probably being achieved, because unlike previous Scorecards,the new scorecard involves continuous supplier performance evaluation rather than a single point oftime evaluation. Prior to the new scorecard, the buyers made sourcing with limited information andthe assessments of product engineer and manufacturing plant manager over a supplier differedsubstantially. As mentioned in the case, the product engineer favored one supplier for its ability toprovide prototypes and assist in engineering analyses, whereas the plant quality manager hadquality issues with the same supplier. The new improved supplier score card has consolidatedsupplier performance and evaluated the suppliers based on three parameters- Quality, timing anddelivery, thereby allowing the buyers to source the materials from suppliers more strategically thanit was earlier.The Suppliers were primarily categorized based on their Quality Performance Ratings into Green,Yellow and Red with each having scores of above 70, between 50-69 and less than 50 respectively.For instance, out of 45 Manufacturing plants of Caltech Inc, 18 manufacturing plants suppliedmaterials to Metalcraft. Metalcraft has rated 18 manufacturing plants in the supplier scorecardsummary with ten plants receiving “Green”, five “yellow” and three “Red”. The color rating indicatedthe degree to which Metalcraft recommended sourcing future business from these plants based onquality rating. More importantly, the Green rating was based on the weightage given to the“Quality” of parts produced, which is the primary basis on which the Supplier scorecard is designedby Metalcraft. These Quality aspects were not just based on defect rates of incoming parts, but onOverall manufacturing plant quality and part launch quality rejects. This led to increased eliminationof defective parts at during the Production stage, thereby early increase in Quality. Eventually in2000, there was an increase in Quality levels by 44%.

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