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Quality & Delivery

Supplier Performance

qualityHendrickson/Watson & Chalin highly value the reliability of a supplier which consistently maintains on-time deliveries and provides high quality parts and service. Furthermore, we understand the importance of visibility in supplier performance as part of the supply chain management process. In order to facilitate transparency in this relationship, our Supplier Portal provides up-to-date information regarding supplier performance.

The Supplier Portal converts a supplier’s performance into a rating system. Quality, Delivery, Lead Time, and Fill Rate are calculated, as well as an Overall Rating. (Please see below for an explanation of each rating type). On the Supplier Portal, the supporting detail data is also available for each of the ratings.

Please note that evaluations and goals for each of the ratings may vary among Divisions and Suppliers.

Overall Rating

chartsThe Overall Rating is an average score which takes into account the supplier’s Quality, Delivery, Lead Time, and Fill Rate scores. This average score is a reflection of the overall performance earned by a supplier.

Overall Rating Formula:

(Quality Rating + Delivery Rating + Lead Rating + Fill Rating) ÷ 4 = Overall Rating

Quality Rating

The Quality Rating is based on the PPM metric, which is the number of parts rejected per million units shipped. The calculated PPM score is then converted to points. (Please note that many Hendrickson/Watson & Chalin Divisions may place more emphasis on the calculated PPM score than the converted points.)

PPM Formula:

(Number of Parts Rejected ÷ Number of Parts Shipped) x 1,000,000 = PPM Score

Converted to Points:

quality_meter

From

To

Points

≥ 0

≤ 50

= 100

> 50

≤ 200

= 90

> 200

≤ 350

= 80

> 350

≤ 500

= 70

> 500

≤ 1,000

= 60

> 1,000

≤ 2,000

= 50

> 2,000

 

= 0


Delivery Rating

The Delivery Rating, otherwise known as the On-Time Rating, is based on the supplier’s ability to deliver parts on-time according to the due date on the Purchase Order or 9J. For most Hendrickson/Watson & Chalin Divisions, in order for a shipment to be considered on-time (or compliant), it must be received within the delivery window of 3 days early through 1 day late, based on the due date.

On-Time Delivery Formula:

Number of On-Time Shipments ÷ Total Number of Shipments = Delivery Rating

Lead Rating

The Lead Rating is calculated as follows: The lead times of all lots are summed by part number. The summed total is then divided by the total number of lots to get the weighted average lead time. This weighted average is then converted to points.

Lead Time Rating Formula:

Sum of All Extended Lead Times (Lead Time for Each Lot) ÷ Total Number of Lots = Weighted Average Lead Time

Converted To Points:

freight_plane_shipping

From

To

Points

> 0

≤ 10

= 100

> 10

≤ 20

= 90

> 20

≤ 30

= 80

> 30

≤ 40

= 70

> 40

≤ 50

= 60

> 50

≤ 60

= 50

> 60

 

= 40

 

Fill Rating

The Fill Rating is defined as the percentage of the order that is delivered on the due date.

Fill Rating Formula:

Number of Compliant Shipments ÷ Total Number of Shipments = Fill Rate

Compliant Shipments:

logistic

Legend

Quantity Received x 1.03 = Sum1

Quantity Scheduled x 1.03 = Sum2

If Quantity Received > Sum2 = OVER

If Sum1 < Quantity Scheduled = SHORT

If Neither OVER or SHORT = COMPLIANT