How do you measure supplier quality score and why?

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If you work with suppliers, you know how important it is to monitor their performance and quality. But how do you measure supplier quality score and why? Supplier quality score (SQS) is a metric that evaluates how well a supplier meets your expectations and requirements. It can help you identify risks, improve communication, and optimize your vendor management process. In this article, we'll explain what SQS is, how to calculate it, and how to use it effectively.

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1 What is SQS?

SQS is a numerical value that reflects the quality of a supplier's products or services. It can be based on various criteria, such as defect rate, delivery time, compliance, customer satisfaction, and innovation. SQS can be measured at different levels, such as per item, per batch, per order, or per supplier. The higher the SQS, the better the supplier's performance and quality.

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2 How to calculate SQS?

There is no one-size-fits-all formula for calculating SQS. Different organizations may have different methods and weights for assessing supplier quality. However, a common approach is to use a scorecard that assigns points to each quality criterion and then sums them up to get the SQS. For example, you can use a scale of 1 to 5 for each criterion, where 1 is the lowest and 5 is the highest score. Then, you can multiply each score by a weight that reflects the importance of that criterion. Finally, you can add up the weighted scores to get the SQS.

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Siddhi Auti

Supporting Start Ups & Innovation | Data Science Consultant | Data Strategy, Machine Learning , Data Visualisation, Data Analytics | Helping organisations make best use of their data!
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Collecting right data & information to get the more accurate results is important. while it is comparatively easier to get this score in case of products, it could be a little difficult to measure this score for service delivery. One easy option is to collect feedback from the service requester / consumer from the organisation at a preset frequency and use it to generate a score. This score can not only provide the insights about the quality but also be used to negotiate the contracts better.

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3 How to use SQS effectively?

SQS can be a useful tool for vendor management, but it should not be used in isolation. SQS can help you compare and rank suppliers, identify their strengths and weaknesses, communicate expectations and feedback, reward high-performers and motivate low-performers, and track and analyze trends over time. However, it can be subjective or biased, depending on the data sources and methods used, and may not capture all aspects of supplier quality. Therefore, SQS should be used as one input for your vendor management decisions and should be reviewed and updated regularly with supplier involvement.

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Devang Oza

Source to pay technology & services
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SQS can be integrated with future sourcing & contracting events and figure out if the supplier still scores low consecutively. My experience has been, if you have a supplier who is consistently scoring low over 1 year then vendor management team are marked to cool off for sometime before they can engage with you. This is to ensure supply chain doesn't have consistently low scoring suppliers adding risk to the overall production delivery.

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4 How to improve SQS?

Improving Supplier Quality Standards (SQS) requires effort from both buyers and suppliers. To improve SQS, buyers should set clear and realistic quality standards and requirements, provide regular and constructive feedback and guidance, establish a collaborative and transparent relationship, implement quality audits and inspections, and offer incentives and recognition for quality improvement and innovation. By improving SQS, both parties can reap the benefits, such as higher customer satisfaction, lower costs, and increased competitiveness.

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Shane Sharp

| Innovative AI Driven Staffing Company | PODs (Partner On Demand) model saving you money in recruitment | Your go-to mass staffing partner
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I believe that the bottom line is to deliver on what you are selling. If you are a recruiting firm, like ours, delivering is how we are measured. The quality of our performance is largely graded on speed and efficiency. If you provide within the aforementioned, cost is less of a clients concern. So, I opine that advancing your firms technology through AI or other efficiencies serve to increase the SQS for your current and future clients.

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5 How to learn more about SQS?

If you want to learn more about SQS and how to apply it to your vendor management process, you can read books and articles on supplier quality management and best practices, take online courses or workshops, join professional networks and forums to exchange ideas and experiences, and consult experts or consultants on the topic. SQS is a valuable metric that can help measure and improve supplier quality. With a better understanding of what SQS is, how to calculate it, and how to use it effectively, you can enhance your vendor management skills and achieve better results.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you measure supplier quality score and why?

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1 What is SQS?

2 How to calculate SQS?

3 How to use SQS effectively?

4 How to improve SQS?

5 How to learn more about SQS?

6 Here’s what else to consider

Vendor Management

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How do you measure supplier quality score and why?

1

2

3

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6

1 What is SQS?

2 How to calculate SQS?

3 How to use SQS effectively?

4 How to improve SQS?

5 How to learn more about SQS?

6 Here’s what else to consider

Vendor Management

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