Metalcraft Supplier Scorecard Case Solution

1. What is the purpose of supplier scorecards at Metalcraft? Are they achieving their goals?

The goal of Metalcraft's supplier scorecard was to find a supplier who produced components with the lowest fault rate. Automobile Original Equipment Manufacturers (OEMs) faced a problem in lowering warranty costs by aiming for zero fault rates from Tier 1 suppliers. The example demonstrates that automakers' management wants high-quality goods to reduce warranty expenses. This has resulted in greater attention on the OEMs' upstream sector, since the success of each of their suppliers may influence the automakers' final goods. Metalcraft, as a Tier 1 supplier, had to satisfy these demands of creating low-defect goods and, as a result, had to simplify their commodity procurement.

Because, unlike prior Scorecards, the new scorecard incorporates continual supplier performance review rather than a single point of time evaluation, the purpose of the supplier scorecard is most likely being met. Before the new scorecard, buyers made sourcing decisions based on little information, and product engineers and manufacturing plant managers' views of a supplier diverged significantly. The product engineer preferred one supplier because of its capacity to offer prototypes and aid in engineering studies, however, the plant quality manager had quality difficulties with the same source, as stated in the case. The new enhanced supplier scorecard combined supplier performance and rated suppliers on three criteria: quality, timeliness, and delivery, enabling buyers to obtain goods from suppliers more strategically than before.

The Suppliers were largely divided into three groups based on their Quality Performance Ratings: Green, Yellow, and Red, with scores of more than 70, 50-69, and less than 50, respectively. Caltech Inc., for example, provided Metalcraft with materials from 18 of its 45 production sites. In the supplier scorecard summary, Metalcraft assigned "Green" to ten production facilities, "Yellow" to five, and "Red" to three. The color grade reflected how likely Metalcraft was to suggest these plants for future business based on their quality rating. More crucially, the green grade was determined by the weighting provided to the "Quality" of components manufactured, which is the major criterion used by Metalcraft to create the Supplier scorecard. These quality factors included not just inbound component defect rates, but also overall manufacturing plant quality and part launch quality rejections. As a result, there was a greater reduction in faulty components throughout the production stage, resulting in an early quality improvement. In the year 2000, there was a 44 percent rise in Quality levels.

2. What are the strengths and weaknesses of the supplier scorecard at metalcraft?