Internal Scorecards for Merchants and Inventory Buyers
Every day, companies evaluate a merchandise vendor’s performance against goals and their worth to the company through a vendor scorecard, such as:
§ How many backorders were caused by the vendor?
§ What are the gross sales for the vendor?
§ How many RTV’s or defective products for the vendor?
§ How many early deliveries and late deliveries for the vendor?
§ What is the overall net contribution to profit for the vendor after all expenses?
But how often do you set the same goals and objectives for your merchants and inventory managers and create an internal scorecard? Often times we find that companies have rigid standards for their vendors and goals in terms of margin and profit, but often times they don’t measure their staff in a similar way. By not doing so, you leave the door open for problems that could erode your margin.
Develop a similar list of metrics that are important to your business. Convey your goals to each person and measure the actual performance against their individual goals. What are some that companies use?
- Category sales
- Gross margin and percent
- Return percent
- Cancellation percent
- Adherence to vendor compliance
- Turnover
- Vendor coop
- Net contribution to profit
- “Markdowns”
Brian Barry is a Senior Consultant with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com.
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