What is the purpose of supplier scorecards?

• A. To evaluate supplier performance against KPIs
• B. To offset exchange rates
• C. To set employee bonuses
• D. To forecast market trends

Answer: (A)

The main idea is to measure supplier performance against predefined KPIs. A supplier scorecard provides an objective view of how well a supplier contributes to your operations, usually tracking metrics like on-time delivery, quality, cost, lead time, responsiveness, and compliance. By turning performance data into a clear score, it helps you see trends, compare suppliers, and drive improvement—informing development plans, contract decisions, and supplier segmentation. This tool is about performance management and supplier relationships, not about offsetting exchange rates, setting employee bonuses, or forecasting market trends, which are handled in other areas. Overall, it creates accountability and consistency in how suppliers are evaluated and managed.