1. Steps For Running Vendor Scorecards

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Vendor ScorecardsVendor Scorecard OverviewAce Hardware Corporation developed a vendor scorecard to provide our suppliers visibility into critical metrics withrespect to sales, inventory levels, sku count, on time shipments, vendor first fill rates, defective claims, negotiatedterms, etc. The Vendor Scorecard data is updated monthly on the sixth of the following month (i.e. theSeptember Vendor Scorecard data will be available on October 6th) and can be run on demand. The first month thescorecard is available is September 2012.1. Steps for Running Vendor ScorecardsBelow are the steps for running the Vendor Scorecard. Note that users have the option of running the scorecard intotal (all buyers summed) OR for one specific buyer associated with that vendor.:a. Log onto Ace Hardware’s Vendors.com website: http://www.acehardware-vendors.com/b. Click on the E-Tools iconc.Log into Ace’s firewall by using your existing ETools user ID and password:** If you are a new user to ETools, go to the home page of vendors.com and click on the login helpbutton under ETools. Then select ID request. Be sure to indicate both that you are a new user as wellas you need access to the Toolbox. Note: It may take up to 2-5 days to have your request for accessprocessed.Vendor ScorecardPage 1 of 9

Vendor Scorecardsd. Under ETools, select the Tool Boxe. Logon using your existing vendor ID and password:** If you are a new user to the Toolbox, go to the home page of vendors.com and click on the login helpbutton under ETools. Then select ID request. Be sure to indicate that you are an existing ETools userand need access to the Toolbox. Note: It may take up to 2-5 days to have your request for accessprocessed.f.Select the ADW Reporting on the Toolbox menu and click “I agree” on the next agreement screen.Vendor ScorecardPage 2 of 9

Vendor Scorecardsg. Under the Supply Chain Visibility tab, select the Supply Chain Visibility Vendor Scorecard.h. Select the desired parameters by first choosing the Time Period (year, month) for the scorecard you wouldlike to run.Second, decide whether you want the data brought back in total for your vendor# or just a specific buyer’sportion of your business. When seeking vendor data in total, do NOT select a buyer code. When seekingjust a specific buyer’s portion of your business, select a buyer.To run the report, click Submit at the bottom of the page. The following is a diagram illustrating thesesteps:Step #1: Select the monthrequesting the VendorScorecard for(NOTE: each month’s scorecardthis not available until the 6 ofthe following month)Step #2: Do notselect a Buyer if youare requesting theVendor in total.Select a Buyer hereonly if you want onlythat Buyer’s portionof the vendorbusiness.Step #3: ClickSubmit to run thereporti.At the Deferred Report Notification screen, click close and in the upper right hand corner of the screen,click the “x” to close out of this report’s launch page.Vendor ScorecardPage 3 of 9

Vendor Scorecardsj.To retrieve the vendor scorecard, click on the Report Status tab. After being launched, the report will gofrom a “Queued” status to “Running” to “Completed”. Once completed, click on the View button to open thePDF file.k.DrilldownsOnce the Vendor Scorecard is run, the sku level detail can be drilled into by clicking any of the TY CurrentPeriod figures within the Wholesale Sales section. Note that the drilldown is only available for the mostcurrent month’s scorecard. The drilldown data is displayed in a Microsoft Excel format.Click on any of thesefields in order to drillinto the sku detail.Vendor ScorecardPage 4 of 9

Vendor ScorecardsThe following is a sample of the drilldown data that is returned at a sku level:2. Definitions of Fields Represented on the Vendor ScorecardThe following provides a description of the various fields presented on the Vendor Scorecard. Note that metricshighlighted in yellow represent key metrics Ace Hardware is focused on.TY is used to represent “This Year” and LY for “Last Year”.Period represented:Fiscal vs. CalendarSectionField NameDescriptionAll BuyersAssociated withVendor#Article Counts per BuyerRepresents the article counts (excludingcancelled skus) for each Buyer associated withthe vendor. When the Vendor Scorecard is runfor the vendor in total (no buyer selected), nobuyers will be highlighted. When the VendorScorecard is run for a specific buyer for thatvendor, that buyer code is highlighted in gray.Wholesale SalesRSC SalesRepresents Warehouse and Bulletin (i.e.promotional bulletins, pallet alley) salescombinedFiscalDrop Ship SalesRepresents the sale of products sold directlyfrom the vendor to Ace’s retailers. If no buyerwas selected when running the report, the “dropship vendor total” and “drop ship selectedbuyers” will be the same. If a buyer wasselected, then the “drop ship vendor totals” willrepresent all drop ship sales for the vendorwhereas the “drop ship selected buyer” will onlyrepresent only the drop ship sales for thatspecific buyer.FiscalEach ServiceRepresents the percentage of our retailer ordersAce was able to fill in terms of eaches.Calculated as each sales as a % of unfilteredeach demandFiscalDollar ServiceRepresents the percentage of our retailer ordersFiscalService Levelsto Ace RetailersVendor ScorecardPage 5 of 9

Vendor ScorecardsAce was able to fill in terms of dollars.Calculated as sales as a % of unfiltered dollardemandInventory ValueSku CountVendor Fill Rateto AceLead TimeVendor ScorecardInventory Represents onhand inventoryFiscal period endOn Order Represents inventory ordered but not yetreceivedFiscal period endCloseout Inventory Represents inventory related to skus that havebeen closed out (article status 9)thAs of 5 day followingfiscal period endAvg Inventory TurnsRepresents how quickly Ace is turning ourinventory. Calculated as: Cost of Sales for Past12 Fiscal Periods divided by Rolling 13Monthend Avg InventoryFiscalRSC Stock ArticlesRepresents all distinct skus stocked in Ace’sRSCs and RDCs that are not cancelled (includesactive, new, closeout, temporary, and seasonalskus).Fiscal period endDiscovery AssortmentIndicates the # of unique articles that are includein each of the Discovery planograms for retailers(Convenience, Core and Super).Fiscal period endNon-Stock RSC ArticlesRepresents a distinct count of articles purchasedby retailers through the RSC’s that are notregularly stocked in Ace’s warehouses.Fiscal period endPO CountRepresents the # of POs with first receiptsCalendar (one monthlag)Avg Receipt per PORepresents the avg # of receipts it takes toreceive the full quantities ordered for POs.Calendar (one monthlag)Avg # of Days toComplete PORepresents on average the # of days betweenthe first and last receipts for all completed POs.Calendar (one monthlag)First Time Lines Fill RateRepresents the # of PO lines received on the daythat the first receipt occurred as a % of the totallines on the PO.Calendar (one monthlag)First Time Eaches FillRateRepresents the # of PO eaches received on theday that the first receipt occurred as a % of totaleaches on the PO.Calendar (one monthlag)4 Day Adjusted LinesFill RateThe # of PO lines received during the first fourdays following the first receipt as a % of the totallines on the PO. (For example, if the first receiptoccurs on 5/1, the adjusted fill rate would includereceipts through 5/4 (4 days total)).Calendar (one monthlag)4 Day Adjusted EachesFill RateThe # of PO eaches received during the first fourdays following the first receipt.Calendar (one monthlag)Negotiated VendorProcessing DaysRepresents Ace’s expectation in terms of howlong it should take a vendor to process our orderand have it ready for shipment. The VendorProcessing Days are used in Ace’s calculation ofExpected Ship Date (PO Date VP Days Expected Ship Date (adjusted for weekend daysand holidays).% of ASN’s PastExpected Ship DateFor both prepaid and collect vendors, thisrepresents the % of ASN’s where the PO wasshipped past the Expected Ship Dates (vendorwas late). Considers only the first ASN for theFiscalPage 6 of 9

Vendor ScorecardsPO.% of Shipments PastExpected Arrival DateRepresents the % of shipments received byAce’s RSC’s later than the PO Expected ArrivalDate. (The Expected Arrival Date is calculatedas the PO date plus the average lead time for thevendor. However, the EAD can be overriddenfor POs by the Inventory Planner.) Considersonly the first receipt for each PO.FiscalWtd Avg Lead Time DaysLead time measures the # of days between thePO date and the receipt date. This metric takesinto account all receipts and is weighted by thedollar value of the receipts. The current periodrepresents the average lead time for a rolling 4week period. The rolling 13 Months represents arolling 56 week measurement.FiscalStandard Cash TermsRepresents the cash discount % and # of daysallowed for payment as negotiated.Vistex ExtraneousAllowanceRepresents the allowance % based on purchasevolume negotiated with the vendor. Typically this% of purchases is charged back on a quarterlybasis.Branching Out AllowanceReflects whether the vendor contributes towardsAce’s Branching Out program which is used tofund new stores’ opening inventory investment.Advertising AllowanceRepresents whether the vendor is committed tofunding our advertising initiatives through anannual advertising allowance.Freight Terms RSCProgramRepresents the freight terms for shipments intoour RSCs. (PPD Prepaid, COL Collect)Freight Terms DSProgramRepresents the freight terms for shipments beingshipped directly from the vendor to retailers.Defective PolicyRepresents the defective claim policy negotiatedat a vendor level. Specific article overrides arepossible.Collaborative VendorIndicates whether the vendor is set up as a CCPvendor whereby they control the warehousereplenishment (cutting of POs) for Ace.Accuracy andCompletenessMeasureInitial Invoice AcceptanceRateRepresents the % of invoices that successfullypass through Ace’s EDI 810 edits.VendorCompliancePolicy A Defective Claims# of ClaimsRepresents the # of Policy A defective claimssubmitted by retailers (no documentationrequired).Calendar Value of ClaimsRepresents the dollar amount of the Policy AdefectivesCalendarClaims as % of RSCSalesRepresents the defective claim dollars as a % ofRSC Sales. Note: there is often a lag betweenthe sale of the product and the filing of thedefective claim.CalendarQuick Response ScoreRepresents the average % the vendor hascomplied with Ace’s Quick Response criteriabased on inbound shipments to Ace’s RSCs.FiscalNegotiatedTermsVendor ScorecardPage 7 of 9

Vendor ScorecardsVendorComplianceFinesVendor ScorecardEDI 850 POIndicates whether the vendor is set up toelectronically receive our purchase ordersthrough an EDI 850 document.EDI 997 POAcknowledgementIndicates whether the vendor electronicallyacknowledges receipt of Ace’s POs through anEDI 997 document.EDI 856 AdvanceShipping NoticeIndicates whether the vendor sends advanceshipping notices (an EDI 856 document) thatsignals to Ace that they have shipped product onour purchase orders.EDI 810 InvoiceIndicates whether the vendor electronicallytransmits their invoices to Ace via an EDI 810document.Electronics FundsTransferIndicates whether vendor allows Ace to makepayments to them via an Electronic FundsTransfer (rather than a check).BarcodeIndicates the # of incidents where themerchandise received at the RSCs had missingor improper bar code labels attached to thepackaging.FiscalNew Start AuditIndicates the # of incidents where the initialshipment of an item contained a mis-match ineither weight, quantity or bar code labeling, ascompared to the initial product data for that item.FiscalPreferred CarrierIndicates the # of incidents where an Acepreferred carrier was not used to shipmerchandise to the RSCs.FiscalNon-EDI InvoicesIndicates the # of incidents the vendor did notaccept Ace’s EDI 850 purchase orders; did notsubmit EDI 856 ASNs; or did not transmit EDI810/812 invoices/credit memos.FiscalEFT, VI InsuranceIndicates that the vendor has not submitted bankinformation so that Ace can pay the vendorelectronically.FiscalPage 8 of 9

Vendor Scorecards3. Fields Represents on the Drilldown LocationDa Count (includes RSCs andRDCs) Each Service Level% (represents Ace’s service level to ourretailers) Article Status by Site (A Active,N New, S Seasonal, T Temporary,9 Close-out, C Cancelled) Corporate Inv Turns (represents inventory turnover for the articlebased on 12 month cost of sales divided by rolling 13 months avginventory) Description Manufacturer#Wholesale Store Count (represents # of stores that purchased thearticle from Ace in the current period) Ace Brand (private label) RSC Sales: Stock vs. Non-stock Defect Goods Policy Override (atarticle level)oEaches TY Current PeriodoSales TY Current PeriodoSales Eaches LY Current PeriodoSales LY Current Period Country of Origin Retailer Cost Minimum Birthdate (the earliest datethe article was added to one of Ace’sRSCs)oEaches TY Current PeriodoSales TY Current PeriodMIU (indicates whether the article issold in multiple selling units i.e. rope,wire)oSales Eaches LY Current PeriodoSales LY Current Period Drop Ship Sales: Merchandise ClassIPU Merchandise Class NameInventory Quantity Product GroupInventory Product Group NameOn Order Quantity (includes internaltransfers i.e. from RDC to RSC) Discovery Status (recommended by Discovery and included in atleast one of Ace’s recommended planograms)On Order Closeout (represents closeoutinventory dollars)4. Questions?a. Contact Ace’s Care Center at (630)990-6593 or [email protected] ScorecardPage 9 of 9

EDI 997 document. EDI 856 Advance Shipping Notice Indicates whether the vendor sends advance shipping notices (an EDI 856 document) that signals to Ace that they have shipped product on our purchase orders. EDI 810 Invoice Indicates whether the vendor electronically transmits their invoices to Ace via an EDI 810 document. Electronics Funds Transfer