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Many logistics professionals who work with 3PLs can probably relate, because even though the practice of using 3PL scorecards is common and merited, it's all too easy for even the finest of players to get "wrong."
As a longtime 3PL executive, I've had a chance to experience the "in's" and "outs" of numerous scorecards over the years, so I've seen this phenomenon often. In the process I've come to believe that while there is no one-size-fits-all list of "do's, there are quite a few "don'ts" like the following that truly apply to almost everyone.
When determining how many attributes to measure on 3PL scorecards, it's tempting to adopt a "the more the merrier" mentality. After all, if measuring five attributes is good, isn't measuring 10 or 20 that much better?
However, when a company elects to include too many activities on scorecards it increases the likelihood that the cards will become too time-consuming for respondents to complete (and complete well) - not to mention too labor-intensive for the people who are responsible for reviewing and acting upon the data collected.
Before electing to include an item on a scorecard, make sure it passes the "so what" test. If no one at your company can justify why it should be there and what the information will be used for, leave it off.
Monitoring Too Many Providers
A similar caveat applies to a scorecard's "sample size" - e.g., the percentage of suppliers required to participate.
Although it might seem beneficial to include all of them, it's not truly realistic for two reasons: First, it costs time and money for suppliers to complete and maintain scorecards, and some suppliers don't handle enough of a company's business to justify the additional expense (regardless of who's footing the bill for it). Second, it takes a great deal of time for companies to monitor each scorecard, and having too many to follow increases the likelihood that some key supplier's activity won't get the attention it merits.
For best results, limit your company's scorecard requirements to the providers and suppliers who handle the most significant portions of your supply chain business - or at least introduce scorecards to those suppliers first.
Including Too Much Flash And Sizzle
We live in a world where sophisticated graphics and special effects have become ubiquitous. But that doesn't always make them essential or appropriate for scorecards.
In fact, companies that make their scorecards too visually or technically creative may find that it detracts from, rather than adds to, the scorecards' value, because the extra bells and whistles can make it difficult for users to be able to quickly identify and interpret what they're looking at. And once a scorecard becomes difficult to decipher, it's lost one of its primary purposes.
Make life easier for everyone by keeping your company's scorecard graphics and functions simple and straightforward. And leave the flashy art direction for your web site or marketing campaigns.
Ignoring Extenuating Circumstances/Misplacing Blame
In an ideal world, 3PLs and other logistics suppliers would be able to fully control their own performances. In the real world, most are highly susceptible to the supply chain equivalent of the domino effect.
For example, if a 3PL needs to get a certain number of shipments from its DC to a retailer's stores by a certain date, it may not be able to do so unless all of that retailer's offshore suppliers have delivered their goods to the facility on time.
Too often, scorecards neglect to properly take such external factors into account. As a result, companies may be giving some suppliers lower scores (and perhaps more penalties) than they deserve and failing to hold others as accountable as they should be.
Make sure your company's scorecards tell the whole story of a provider's performance by clearly highlighting any "outside" factors that may have affected its scores.
Settling For Delayed Data
As is the case with many supply chain functions, timing is everything in terms of capturing scorecard information.
While even "late" scorecards can be useful, those that are filled out too far after the fact deprive companies of an essential scorecard advantage: identifying small problem spots or performance issues before they turn into bigger ones.
To keep this data lag from occurring, use real-time, automated data collection methods for your scorecards wherever possible, bearing in mind that many of the systems your company or its 3PLs use (such as WMS, E-time or labor management) may have already been collecting some of this for you.
Failing To Fully Involve 3PLs
Most 3PL scorecards are an interesting dichotomy. On the one hand, they're all about the 3PLs being measured. On the other, 3PLs usually only have a limited involvement in the process.
For example, when considering what to include on their scorecards (or how to format them) most companies don't think to ask whether their 3PLs have developed their own. And that's a huge oversight because you are, after all, talking about companies that have spent years being scorecarded themselves, enabling them to draw from some of the very best scorecarding practices.
In addition, many companies don't always consider it important to give 3PLs timely access to their scores, a fact that limits 3PLs' ability to identify and deal with issues that need to be corrected and improved upon.
Don't underestimate the incredible value your 3PLs can bring to your scorecarding endeavors. Use their expertise and insights to build everything from better scorecards to better overall evaluation sessions. If you do, your scorecards will have a much better chance to live up to their full potential. If you don't - well, you know the score.
Source: APL Logistics
Keywords: supply chain management, supply chain management IT, logistics IT solutions, supply chain solutions, transportation management
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