How to create a supplier scorecard: Key metrics, template, and best practices
- What is a supplier scorecard?
- Who uses supplier scorecards?
- What are some benefits of using supplier scorecards?
- 9 metrics to consider before creating a supplier scorecard
- How to create a supplier scorecard in 10 steps
- Supplier scorecard template
- Supplier scorecard example
- When and how to use a supplier scorecard
- Supplier scorecard best practices
- Streamline your procurement process with Ramp
Procurement teams often struggle with inconsistent supplier evaluation methods and scattered performance data, making it difficult to objectively compare vendors.
Supplier scorecards solve these challenges by providing a structured framework to measure, track, and analyze vendor performance across standardized metrics, enabling procurement professionals to make data-driven decisions and improve supplier management.
What is a supplier scorecard?
A supplier scorecard is a performance measurement tool that evaluates supplier performance using predetermined metrics. It provides a systematic way to assess how well suppliers are meeting your business's requirements and expectations, making it easier to compare vendors objectively.
Supplier scorecards measure vendor performance against key performance indicators (KPIs) like quality, cost, and on-time delivery. They play an important role across procurement, supply chain, and finance by supporting consistent supplier evaluations, reducing bias, and ensuring supplier performance directly supports your business objectives.
They’re typically used in the following situations:
- When evaluating existing supplier relationships
- During the supplier selection processes
- For ongoing supplier performance monitoring
- As part of supplier development initiatives
- When making strategic procurement decisions
- During contract renewal negotiations
- To identify and mitigate supply chain risks
- For communicating performance expectations to suppliers
Who uses supplier scorecards?
Supplier scorecards are valuable across departments, helping your teams align supplier performance with business objectives. Roles that often rely on supplier scorecards include:
- Procurement managers: Use scorecards to compare vendors objectively and negotiate stronger contracts
- Supply chain leaders: Rely on vendor scorecards to monitor delivery timeliness and quality consistency, as well as overall supply chain resilience
- Operations teams: Track scorecard data to ensure suppliers meet production needs without causing delays or added costs
- Finance executives: Evaluate cost-effectiveness, payment terms, and total cost of ownership when managing supplier relationships
- C-level leaders: Use supplier performance insights to shape strategic sourcing, manage risks, and support long-term business goals
Supplier scorecards are especially relevant in regulated industries and companies with complex supply chains, where compliance and quality assurance are critical. They provide measurable data, giving each stakeholder the visibility needed to make informed decisions and maintain accountability while ensuring cost-effectiveness.
What are some benefits of using supplier scorecards?
Supplier scorecards improve procurement operations and strengthen your business partnerships by helping with:
Improved supplier performance and accountability
Clear metrics provide visibility into supplier strengths and weaknesses, making it easier for your business to identify gaps, drive improvements, and hold vendors accountable for results.
Reduced costs and supply chain risks
Scorecards help reduce operational costs and minimize disruptions across your supply chain by tracking performance in areas such as quality, delivery, and financial stability.
Streamlined procurement and vendor management
A consistent framework for evaluation makes it easier to compare vendors objectively and prioritize high-value relationships, ultimately simplifying procurement decisions.
Enhanced compliance and quality control
Scorecards quantify performance against product quality, timeliness, and regulatory standards, ensuring suppliers meet compliance requirements and deliver to expectations.
9 metrics to consider before creating a supplier scorecard
To get the most from your supplier scorecard, apply the following metrics at different stages of the supplier lifecycle. From initial qualification to ongoing performance reviews, each metric serves a specific purpose, whether it's verifying operational reliability, managing risk, or identifying opportunities for improvement.
1. Product quality rate
Product quality rate tracks the percentage of units received without defects. It reflects the supplier's manufacturing consistency and quality control capabilities. Monitoring quality rates helps your procurement team set quality benchmarks and reduce inspection costs by confirming that your products meet expectations from the start.
Use cases: Routine quality audits, onboarding new suppliers, or reviewing recurring defect issues
2. Return frequency
Return frequency measures how often products are returned due to defects, damage, or incorrect specifications. High return rates signal quality or handling issues that increase operational costs and erode customer trust. Monitoring this metric helps your team pinpoint problem areas and initiate corrective action plans.
Use cases: Evaluating cost impacts from warranty claims, tracking customer complaints, or identifying high-risk SKUs
3. Customer approval rating
This score aggregates customer feedback related to supplier-sourced products. It connects supplier performance directly to brand perception and customer experience. Declining ratings serve as early warnings, while high ratings support continued partnership with reliable vendors.
Use cases: Supplier performance evaluations or customer satisfaction analyses
4. Delivery timeliness
Delivery timeliness tracks the percentage of deliveries that arrive on or before the promised date. It evaluates supplier reliability and impacts production schedules and inventory levels. Consistent delivery delays can disrupt operations, while strong performance supports lean inventory strategies.
Use cases: Monthly performance reviews, fulfillment analysis, or logistics planning sessions
5. Order completeness
Order completeness assesses whether shipments arrive with the correct quantities, labeling, packaging, and documentation. Incomplete or inaccurate orders lead to delays and added workload. High completeness scores reduce administrative effort and enable smoother operations.
Use cases: Monitoring order accuracy, managing fulfillment issues, or tracking invoice discrepancies
6. Value-to-price ratio
The value-to-price ratio compares the total value delivered, whether it’s quality, support, reliability, or innovation, against the overall cost. It moves beyond unit pricing to account for volume discounts, payment terms, warranty coverage, and service levels. Use it to make smarter long-term sourcing decisions.
Use cases: Supplier selection, contract negotiations, or total cost of ownership reviews
7. Logistics expense
This measures the full cost of getting products from the supplier to your facility, including freight, customs, handling, and any special shipping requirements. Tracking this expense over time helps identify opportunities for cost savings through packaging improvements, route changes, or vendor consolidation.
Use cases: Evaluating total landed cost or reviewing distribution strategy
8. Communication efficiency
This evaluates how quickly and effectively a supplier responds to inquiries, resolves issues, and communicates updates. Poor communication slows down operations and increases risk, while efficient exchanges foster trust and streamline day-to-day coordination.
Use cases: Vendor onboarding, incident resolution tracking, or collaborative project reviews
9. Customer service and support
This metric covers service-related elements such as responsiveness, technical support quality, and issue resolution speed. It reflects the overall working relationship and is especially important for suppliers of complex or customized goods. High service levels typically reduce internal resource strain and improve operational outcomes.
Use cases: Measuring post-sale support quality, reviewing help desk or technical assistance interactions, or assessing long-term partners
How to create a supplier scorecard in 10 steps
To develop a high-impact supplier scorecard, start by defining the specific performance areas that matter most to your business, such as delivery timeliness, product quality, responsiveness, and sustainability.
By selecting metrics that reflect these priorities, your team can consistently assess suppliers, compare them objectively, and make strategic sourcing decisions based on hard data. Here’s how to create a scorecard in more detail:
- Define objectives and metrics: Identify what's most important for your business, such as quality, delivery, cost, or service. Limit metrics to 5–10 KPIs to keep the scorecard focused.
- Establish performance criteria and weightings: Set standards for each metric for good vs. poor performance. Assign weights to each category based on your priorities. Create a scoring system, such as a 1–5 scale.
- Gather stakeholder input: Consult with procurement, operations, quality, and finance teams. Include input from end-users who interact with suppliers.
- Design the scorecard template: Create a clear, easy-to-understand format. Include sections for supplier information, performance metrics, scores, and trends. Add space for comments and improvement recommendations.
- Collect baseline data: Gather historical performance data for each supplier and establish initial benchmarks for comparison. Document data sources for consistency in future evaluations.
- Implement measurement processes: Define how often you’ll collect data, establish who’s responsible for data collection and entry, and ensure consistent measurement methods across all suppliers
- Communicate with suppliers: Share the scorecard metrics and methodology with suppliers. Explain how you’ll measure performance and why it matters. Set clear expectations for performance improvement.
- Review and analyze results: Compare performance across suppliers and against benchmarks. Identify trends and patterns over time. Highlight areas of strength and opportunities for improvement.
- Provide feedback and develop improvement plans: Schedule regular review meetings with suppliers. Collaborate on action plans for underperforming areas. Recognize and reward exceptional performance.
- Refine the scorecard: Periodically review the effectiveness of your metrics. Adjust weightings or criteria based on changing business needs. Incorporate feedback from both internal teams and suppliers.
Once you start using your supplier scorecard, you’ll be able to identify underperforming suppliers and spotlight overperformers. These insights can inform corrective action plans, highlight areas for collaboration, and build a more cost-effective, responsive supply chain.
Supplier scorecard template
Start with a simple structure to make scorecards practical and easy to use. This supports consistency across evaluations and makes it easier to compare suppliers objectively.
A basic supplier scorecard should include:
- Supplier name and contact information: Company name, primary contact, email, phone
- KPIs and their weightings: Key performance indicators, such as quality, delivery, cost, and service, with assigned weights that reflect business priorities
- Scoring criteria: A standardized scale for rating performance against each KPI
- Comments or additional notes: Space to capture context, improvement recommendations, or qualitative feedback
Here’s a simple scorecard template you can adapt:
Supplier name | Contact info | KPI | Weighting | Score (1–5) | Comments/notes |
|---|---|---|---|---|---|
[Supplier A] | [Name, email] | Quality | 40% | 4 | Strong quality, minor defect issues |
Delivery | 30% | 5 | On-time, reliable lead times | ||
Cost | 20% | 3 | Competitive, but limited discounts | ||
Service | 10% | 4 | Responsive and helpful support |
Supplier scorecard example
Supplier scorecards typically combine quantitative and qualitative metrics to evaluate vendor performance across multiple categories.
This example scorecard focuses on three critical metrics: product quality, return frequency, and order completeness. Each vendor is evaluated using a scoring scale, with lower return frequency translating to a higher score. A total score helps compare suppliers at a glance:
Vendor | Product quality | Return frequency | Order completeness | Total score |
|---|---|---|---|---|
Vendor A | 5 | Low | 5 | 5 |
Vendor B | 4 | Low | 3 | 3 |
Vendor C | 1 | High | 2 | 1 |
Vendor D | 4 | Medium | 5 | 4 |
What does this example scorecard tell us?
- Vendor A stands out as a top performer across all three categories, making it a strong candidate for preferred supplier status or long-term contracts
- Vendor C, with poor quality and high return frequency, may require corrective action or reassessment of the relationship
- Total scores provide a quick reference, but decisions should also consider context, such as order volumes, supplier responsiveness, and how critical their products are to ongoing operations
When and how to use a supplier scorecard
Supplier scorecards are most effective when you apply them at key milestones where objective data supports critical decisions. They help ensure performance meets agreed standards and strengthen accountability across your supplier base.
When to use a supplier scorecard
- Onboarding new suppliers: Verify reliability before deepening the partnership
- Regular performance reviews: Conduct quarterly or annual evaluations to track consistency
- Contract negotiations: Use objective data to guide renewal discussions and pricing
- Ongoing monitoring: Identify risks, spot inefficiencies, and measure progress on improvement initiatives
- Strategic sourcing: Compare vendors consistently and prioritize high-value partners
How to use a supplier scorecard
- Define supplier scorecard metrics and goals: Choose KPIs that align with your business objectives and set clear performance targets
- Collect accurate data: Draw from purchasing records, quality reports, and supplier submissions
- Score and analyze: Apply a scale or weighting system, then review results to identify strengths, weaknesses, and trends
- Communicate results: Share findings constructively with suppliers, recognizing achievements and outlining improvements
- Refine over time: Revisit metrics and thresholds regularly to reflect changing business needs
A supplier scorecard brings objectivity and consistency to vendor management. With clear metrics and regular evaluation, you can make better decisions while building stronger, more productive partnerships throughout your supply chain.
Supplier scorecard best practices
The following best practices will help ensure your scorecards drive measurable improvements and stronger supplier partnerships:
- Keep KPIs consistent and update thresholds as priorities shift: Track the same measures over time to ensure comparability, but adjust performance targets as business needs evolve
- Communicate expectations clearly to suppliers: Clearly outlining scorecard metrics up front sets expectations and makes the evaluation process more collaborative
- Integrate performance data with finance and procurement systems: Bringing all performance data into one place helps ensure accuracy, saves you time, and makes it easier for your teams to act on shared insights
- Recognize top performers and support underperformers: Use scorecard results to recognize top-performing suppliers, and work closely with underperformers to address gaps and improve outcomes
Streamline your procurement process with Ramp
While Ramp doesn’t create supplier scorecards, our procurement software complements your evaluation efforts by automating key purchasing workflows, centralizing vendor data, and ensuring policy compliance. This streamlines the entire procurement process, reducing manual work, improving visibility, and helping your team stay focused on strategic decisions.
With Ramp, you can:
- Intake in an instant: Drop a contract into Ramp’s procurement software; our AI will parse the details and automatically complete the request
- Centralize communication: Route approvals, consolidate requests, and share documents in one place to ensure transparency and accountability
- Know your committed spend: Automatically generate purchase orders for clear visibility into upcoming invoices, while flagging discrepancies in units, prices, or totals
- Support risk mitigation: Protect against fraud and errors with automated 3-way matching
- Get the best deals: Benchmark quotes against thousands of real, anonymized transactions to negotiate with confidence and secure the best price
- Integrate seamlessly: Connect Ramp with your ERP and finance systems to unify supplier data and eliminate manual work
Ready to learn more? Try an interactive demo and see how Ramp Procurement can help improve your vendor management process.
FAQs
A supplier scorecard highlights strengths and weaknesses across key areas such as quality, delivery, and cost. By tracking these metrics consistently, your business can reduce risks and resolve issues faster, while building a more reliable and efficient supply chain.
The 7 Cs are a framework for assessing suppliers: competence, capacity, commitment, control, cash, cost, and consistency. Together, they help procurement teams evaluate whether a supplier can reliably meet business needs.
A supplier performance matrix is a tool that compares vendors based on critical factors such as quality, delivery, price, or service. It helps with supplier management and provides a visual way to rank suppliers, making it easier to identify top performers and spot underperformers.
“When our teams need something, they usually need it right away. The more time we can save doing all those tedious tasks, the more time we can dedicate to supporting our student-athletes.”
Sarah Harris
Secretary, The University of Tennessee Athletics Foundation, Inc.
“Ramp had everything we were looking for, and even things we weren't looking for. The policy aspects, that's something I never even dreamed of that a purchasing card program could handle.”
Doug Volesky
Director of Finance, City of Mount Vernon
“Switching from Brex to Ramp wasn’t just a platform swap—it was a strategic upgrade that aligned with our mission to be agile, efficient, and financially savvy.”
Lily Liu
CEO, Piñata
“With Ramp, everything lives in one place. You can click into a vendor and see every transaction, invoice, and contract. That didn’t exist in Zip. It’s made approvals much faster because decision-makers aren’t chasing down information—they have it all at their fingertips.”
Ryan Williams
Manager, Contract and Vendor Management, Advisor360°
“The ability to create flexible parameters, such as allowing bookings up to 25% above market rate, has been really good for us. Plus, having all the information within the same platform is really valuable.”
Caroline Hill
Assistant Controller, Sana Benefits
“More vendors are allowing for discounts now, because they’re seeing the quick payment. That started with Ramp—getting everyone paid on time. We’ll get a 1-2% discount for paying early. That doesn’t sound like a lot, but when you’re dealing with hundreds of millions of dollars, it does add up.”
James Hardy
CFO, SAM Construction Group
“We’ve simplified our workflows while improving accuracy, and we are faster in closing with the help of automation. We could not have achieved this without the solutions Ramp brought to the table.”
Kaustubh Khandelwal
VP of Finance, Poshmark
“I was shocked at how easy it was to set up Ramp and get our end users to adopt it. Our prior procurement platform took six months to implement, and it was a lot of labor. Ramp was so easy it was almost scary.”
Michael Natsch
Procurement Manager, AIRCO
