Excel, Purchasing, Supply Chain Management

In all likelihood, your first encounter with a balanced scorecard would have been your report card, where individual school projects, tests and exams were given a certain weight in accordance to their level of importance. In purchasing, this tool is put to practice in supplier selection and supplier evaluation. It is used to avoid risk, reduce costs, mitigate rogue or maverick purchasing and ultimately aid in the selection of the most qualified good or service provider. Performance metrics are listed in columns and are then scored using a standard numerical value range often being 0% to 100% or 1 through 10. Each individual score is then multiplied by the weight determined by their level of importance and are summed at the bottom, often converted into a percentage format. This is part 2 of a 2 article series that will provide the reader with tips and best practices for the creation of supplier evaluation balanced scorecards.


Now that you have selected your supplier(s) using the points outlined in part 1 of this article, titled Creating a Supplier Selection Balanced Scorecard in Excel, your supplier evaluation responsibilities are far from complete. Suppliers must be regularly tracked to ensure that KPIs including price, quality and reliability, or whatever metrics are important to your organization, are available for evaluation. Your Supplier Evaluation Scorecard will be broken down into two separate tables: your Supplier Evaluation Scorecard and your Historical Tracking Scorecard.


Supplier Evaluation Scorecard


The Supplier evaluation table will include columns possessing the following titles:

  • KPI Groups (optional)
  • Key Performance Indicators (KPIs)
  • Performance Target (optional)
  • Measurement
  • Acceptable Score
  • Score This Month
  • Variance from Acceptable Score


KPI Groups (optional) and Key Performance Indicators (KPIs)

KPIs include a description of the metrics used to evaluate the success of the good or service provider. The KPIs can be grouped into a KPI Area (optional) column that proceeds it using KPI groups such as Customer Service, Cost, Quality, etc.


Performance Target (optional)

The optional Performance Target column includes the quantifiable goal you wish for the KPI row to achieve. While it is nice to be specific in producing your supplier evaluation balanced scorecard, the point is to spend your time evaluating, as opposed to producing the most detailed document. So use the Performance Target column with caution.



The Measurement column describes precisely how you will quantify the score associated with each KPI.


Acceptable Score

The following column titles are self-explanatory. The Acceptable Score is the score that you would accept. This is the passing score, not necessarily a perfect score.


Score This Month

The Score This Month column is where you do the actual scoring. The time interval does not have to be monthly. Use the evaluation time interval that is appropriate for your situation. It is important to remain constant in your scoring for the purpose of incorporating this data with the Historical Tracking Scorecard that we will get to in a minute.


Variance from Acceptable Score

A simple =Score This Month cell – Acceptable Score cell formula will deliver your Variance from Acceptable Score for each KPI. The resulting value is what will be used in your Historical Tracking Scorecard.


Historical Tracking Scorecard


The Historical Tracking Scorecard is where your historical scores are recorded and evaluated. This table can either be placed on the same tab, or on its own separate tab. The table is a stripped-down version of the Supplier Evaluation Scorecard including the optional KPI Area column if you added one, an identical KPI column, and your time interval columns. As this example uses months, we will add 12-time intervals to evaluate. Of course, you can evaluate weekly, quarterly, yearly, etc. Each time interval, copy the score from the Variance from Acceptable Score column in the Supplier Evaluation Balanced Scorecard and paste those figures into the time interval column that corresponds with it in the Historical Tracking Scorecard.

To make the Historical Tracking Scorecard more visual: turn it into a  line chart by selecting the entire table’s containments and clicking on the Insert Tab ==> Chart ==> Line

Right click inside the chart and click Select Data. In the Select Data Source menu, for each Legend entry, highlight the name field and click the KPI cell (start with the first KPI). Then highlight the Y values field and select the entire time interval ROW that are associated with that KPI, all 12 months in our example. Do not include your KPI name. Repeat this step for every KPI. For the Horizontal (Category) Axis Label field, highlight the row cells that indicate your time intervals (month numbers/names, quarter names, etc.) You now have a beautiful chart that will help visualize your historical scores for each KPI. Customize the chart according to your preferences.

Now that you have completed your Supplier Evaluation and Historical Tracking Scorecards, it is vital to spend the time to fill them out within the specified time interval (weekly, monthly, quarterly, etc.). If for whatever reason you miss a time period or neglect to analyze the evaluation data you spent time making clear and easy to interpret, you will have wasted the time you spent producing the scorecards. It is also crucial that you remain constant in your scoring standards. Otherwise your supplier’s performance data will be distorted over time.




The purchasing department is in a strong position to leverage cost savings into profit. The profit leverage effect dictates that reducing operating expenses is more efficient than increasing sales. Situated at the beginning of the production process of a product or service, the procurement stage is in an excellent position to reduce overall costs, especially in the short term. This is why companies often resort to reducing headcount when they run into financial difficulties. Reducing operating costs is the fastest way to produce a short-term impact on the bottom line.


With this in mind, let’s talk about purchasing’s profit leverage effect. The following example will display how every dollar saved in purchasing goes directly to the bottom line, and it does so in a way that is more efficient that it would be through increased sales.


Your sales are $120,000 and your cost of goods sold (COGS) are $60,000. Within your COGS is your cost of purchased goods, which is 75% of your COGS ($45,000). Let’s say you reduce your cost of purchased goods through a combination of supplier relations and negotiations by 10%, you would save $4,500. Your cost of purchased goods is now $40,500. Your COGS are now $55,500.

Reducing costs of goods sold decreases your COGS from 50% to 46.25% of sales. Your operating income (net profit) therefor increases by the same amount. Let’s say operating income was $25,000 or 21% of sales, after the 10% of purchasing cost savings, net profit increased by 18% to $$29,736. That’s pretty good!


Now let’s look at what the sales department would have to do to achieve a comparable increase in net profit. To calculate how many more sales dollars would have to be generated we divide the needed additional profits ($4,500) by the operating profit margin (21%). The sales department will therefore have to sell an additional $21,428.57 worth of your product or service, which is the equivalent of increasing sales by 15%. And that does not factor in the marketing costs associated with increasing sales.

Which is easier? Decreasing the cost of purchasing by 10% or increasing sales by 15%? For most companies, that large of an increase in sales with no increase in advertising spend would be an incredible challenge, especially in the short run. On the other hand, reducing the cost of purchases by 10% is very attainable for organizations who have not traditionally managed purchasing as a strategic function.


Key Takeaway: every dollar saved through purchasing goes straight to the bottom line. By contrast, only 21% of sales goes to the bottom line, the remainder is consumed by the costs associated with doing business.



Purchasing, Supply Chain Management

Purchasing supply chain management software is challenging as just like the supply chain, it includes a number of moving parts, departments and changing regions. When you migrate to a new software platform, all your stakeholders are affected. Why do we buy software in the first place? The purchasing decision is not really about the software itself. It’s about the issue that the software will solve, or at least, you hope it will solve.  In the context of a complex supply chain, here are some common goals which those in the position to purchase software wish to achieve:


  • Increased efficiency through the automation of a pre-existing manual business process
  • Offer new functionality, helping you do more or increase your organization’s quality of service
  • Compliment current software platform, so that well-functioning pre-existing systems can live-on
  • Futureproofing, ensuring the software spend down the line is minimized


Traditional supply chain ERP software is corporate organization outward focussed with a high emphasis on stakeholder integration and collaboration. You need to consider a product that will not only integrate into your organization’s business processes, but also those of your suppliers, vendors and other partners which you interact with on a regular basis. Some important considerations for a potential ERP implementation include:


  • How employees within your organization will use the software
  • How they do those activities and processes today
  • How your partners including vendors and logistics service providers interact with you today and if it will change their process. Will they have the desire to / do they possess the ability to interact with the software you are looking to procure.


Some organizations look at purchasing software from a procurement perspective. Their procurement teams might create an RFP and will have particular requirements. They will research potential providers and consult with different departments in a cross functional approach. Ultimately, a document will be created, outlining what they are looking for in a vendor, potentially in the form of a balanced scorecard. From there they will shop around for that software.


Another option is for the supply chain organization within the company to own the software purchasing decision. The organization is familiar with how they get products from purchasing to logistics to customer service to planning: all of those departments will be considered in some way. This organizational focus is in a better position to represent the specific needs of the various business functions. While the procurement approach is often more concerned with making the most feasible financial decision. Of course, the best approach to a major supply chain software procurement decision would be a combination of the two methodologies.


Job Search, Supply Chain Management

The SCMA Alberta 2017 Conference in Red Deer, Alberta saw The Canadian Supply Chain Sector Council launch new videos profiling People in Supply Chain.

These video profiles focus on professionals working in Canada’s supply chain sector in a variety of industries. They provide a sample of the supply chain management career options. All english videos feature french subtitles and french videos include english subtitles.

View this post which includes 7 more career profile videos.


Melinda Nycholat
Director, Contract Services
Defence Construction Canada

  • Civil engineering and construction backgrounds are very useful in procurement roles

  • Cross-functional teams are prevalent

  • Procurement at the Department of National Defense (DND) provides an ever-changing landscape of daily challenges)


Cody Birkett
Cando Rail Services Ltd.

  • Mechanical backgrounds are preferred

  • There is a communications aspect to rail transport

  • Physical fitness is important

  • A culture of safety (Track SMART)


Stefanie Erickson
Logistics Coordinator
W.A. Grain & Pulse Solutions

  • Opportunities for advancement (from part time office assistant to regional logistics coordinator)

  • Scheduling and coordination proficiencies are vital responsibilities

  • Technical dexterity is important (as within any industry)


Supply Chain

Catherine Finnie-Wolff
Team Lead, Supply Chain
Access Pipeline

  • Cross-functional team management is vital

  • There is an importance to providing solutions by thinking outside the box

  • Technology appears to be lagging at least within this particular organization

  • On the job training is common

Support Services

Deidra Helmig
Senior Safety Consultant
Boreal Services Group Inc.

  • Relationship building is important as always.

  • Many women work within safety.

  • There will always be a human element in safety


Meagan Jonsson
Operations Supervisor
DHL Supply Chain

  • A lot of ethnic diversity.

  • Many women are currently working within warehouse settings.

  • People will always be needed to verify stock quantities.



Jamie Montesano
Total-R Inc.


Opportunities for promotions.

  • Engaging work that results in job satisfaction.

  • Hours are regular, overtime is rare.


Inventory Management, Supply Chain Management

In pursuing my Post-Graduate Certificate in Supply Chain Management – Global Logistics, I could not help to draw parallels between the components of SCM and my previous career in mass-participant sports event operations. This indirect background in Supply Chain greatly facilitated the program as I had a constant supply of past professional examples to which I could relate many concepts. The biggest take-away was that all three segments of Supply Chain Management, which include: purchasing, inventory management and logistics are required for a well-managed event, whether on a large or small scale. This article focusses on how mass participant event operations relates to the supply chain management component of inventory management and is the third in a series of three articles on the topic. The first on purchasing can be found here and the second on logistics can be accessed here.




In event operations, both Just-In-Time (JIT) and traditional warehouse inventory (AKA Just-In-Case) is employed. Re-usable equipment and other objects are stockpiled in storage locations that can include a warehouse, shipping container, trailer or within the event’s office space. Trailers and shipping containers are particularly handy as they are both modular and mobile. One or all containers can be sent to the event venue or moved to an alternate lot and as they are already packed, there is no need to transfer the equipment from storage to a transportation device. Trailers are especially useful for events that tour multiple locations throughout the season and can incorporate highway with rail transportation in the form for intermodal piggybacking. Operations managers will want to perform the light integrity test to ensure the container’s contents will be safe from the elements. However, trailers and shipping containers are not perfect: items stored inside are difficult to access and their outdoor placement puts them at risk of theft, overheating and freezing.

On-demand warehousing is often an attractive option for events who desire the reliability of traditional warehousing, with the scalability of an on-demand service. Storing items inside a traditional warehouse allows for greater access to items that are required by event staff on a moderate basis, regular to intermittent item picking and offers protection from the elements. On-demand warehouse space also allows for organizations to take advantage of potential economies of scale offered in the form of lot size discounts and transportation discounts. Here an event can spread out the procurement of a lot size of items across multiple events, acquiring time and cost savings. Warehouses are an ideal storage location for safety stock.



For items that are required for the specific event, it often makes no sense to have them delivered to your warehouse, just to have them loaded up and transported to the event venue at a later date. As many medium to large scale events have access to their venue in the days or week leading up to the event, inventory holding savings, transportation savings and time savings can be achieved by having those items shipped directly to venue. This works particularly well for high volume items that you will receive in the days leading up to the event, including food, water, new signing, sponsor banners and other last minute items. The Just-In-Time benefit of eliminating inventory carrying costs is countered by the high risk of stock-out (in this case, not receiving your items on time), due to unexpectedly long delivery lead times. JIT should therefor only be employed with trusted suppliers, with reliable carriers, and for items that make sense to only arrive in the days before.



A combination storage location types


On-demand warehouse space can be useful in alleviating the downsides of trailer and shipping container storage, yet warehousing overhead costs need to be taken into account. It is not uncommon for large scale events to diversify their inventory across office space, warehouse space and trailer/ shipping containers. This was you can take advantage of the mobility of shipping containers and trailers while taking advantage of the convenience of in-office storage locations for items that require regular access. In addition, items that require temperature control and moderate access, whether in the form of intermittent picking or otherwise will benefit from in-demand warehousing.


Purchasing, Supply Chain Management

In pursuing my Post-Graduate Certificate in Supply Chain Management – Global Logistics, I could not help to draw parallels between the components of SCM and my previous career in participant sports event operations. This indirect background in Supply Chain often led to constant back-and-fourth between my instructors and I. The biggest take-away was that all three segments of Supply Chain Management, which include: purchasing, inventory management and logistics (transportation) are required for a well-managed event, whether on a large or small scale. This article focusses on how mass participant event operations relates to the supply chain management component of purchasing (procurement) and is the first in a series of three articles on the topic. The remaining two will focus on logistics and inventory Management.


An event will require the procurement of various goods and services to ensure a quality experience for their participants. Needless to say, large scale events will require more goods and services than medium to small scale events, while benefitting from economies of scale. As mass participant events often allow individuals to register for the event up until the days, or even the day before that event is to take place, accurate forecasting is required. In the case of a marathon, organizers often use a 3-year moving (or rolling) average of registration numbers as of a certain calendar date (sometimes every day of the year) to forecast based on historical data. For example: on September 1, 10,000 were registered in 2015, 11,500 were registered in 2016 and 11,250 were registered in 2017. Therefor we can forecast that 10,917 will register by September 1, 2018. That data is to be compiled in Excel, where a trendline can be used to forecast sales. You can now order the required goods (food, water, medical equipment, timing chips, merchandise, participant shirts, finisher’s medals, etc.) and services (medical staff, parking attendants, waste disposal services, massage therapists, physiotherapists other contractors, etc.).

The Forecast is Always Wrong

The problem with a moving average is that it will lag behind the trend, so it is advised to utilize qualitative (Delphi method, market research, and historical life-cycle analogy) data in combination to quantitative (historical) data for forecasting purposes. New events are forced to rely completely on qualitative data, as no historical data exists. It is best practice for event operations professionals to order extra quantities (safety stock) to mitigate an unexpected last minute surge in registration (inaccurate forecast), as I can assure you that all hell will break loose if you under forecast participant shirts or finisher’s medals. It is often less expensive to order hundreds of one particular item from overseas that are shipped months ahead of time by sea, than a small order of last minute items shipped by air.

However, in the case of merchandise, you want to sell out. As marginal profit is most often lower than marginal cost per unit, the cost of not selling an item of merchandise outweighs the cost of selling an additional item. Therefore your optimal order quantity is most likely lower than your estimated demand. Chances are you overestimated demand anyway as the forecast is always wrong. Plus the inventory carrying cost associated with excess inventory will cause all kinds of headaches down the road.


Strategic Partnerships

As is often the case when negotiating contracts in a Just-In-Time or traditional Order-To-Stock environment, the creation and fostering of strategic partnerships is paramount. In my experience, it is advantageous to give a little extra, for example: taking a less hardline stance when negotiating price. No one appreciates feeling ripped-off, which will lead to cognitive dissonance and a toxic relationship moving forward. Quality, especially in the case of a top-tier/ premium event, is rarely worth sacrificing. Delivery lead time is also rarely worth delaying, with the exception being for the most experienced of event directors.


Job Search, Supply Chain Management
The 2017 SCMA Alberta Conference in Red Deer, Alberta saw The Canadian Supply Chain Sector Council launch new videos profiling People in Supply Chain.

These video profiles focus on professionals working in Canada’s supply chain sector in a variety of industries. They provide a sample of the supply chain management career options. All english videos feature french subtitles and french videos include english subtitles.

View this post which includes 7 more career profile videos.


Brad Beerling
Logistics Manager
Meridian Manufacturing Inc.

“Be willing to accept problems are going to happen, be willing to adapt to them, learn from them and grow with them.” —Brad Beerling

  • Getting into logistics requires finding someone to learn from, finding a company that is willing to spend their time on you

  • Be prepared and willing to react to problems that arise


Warehousing and Logistics

Brent Ellis

Director, Commercial Warehouses

Wills Transfer Limited

  • Vendor Managed Inventory (VMI) requires continuous coordination, lots of reporting

  • Understanding the needs of your customers

  • Opportunities for advancement within the warehouse industry

Supply Chain Management

Patrick Etokudo
Director of Supply Chain Management

“The skills that you need generically, to perform well as a supply chain manager would be things like interpersonal skills, great communication skills, an ability to negotiate, an ability to build networks and maintain relationships.” —Patrick Etokudo

  • Soft skills include: Interpersonal skills, communication, negotiating, build networks and maintain relationships.


Serge Faucher
Executive Director
Les entreprises Dupont 1972 inc.

  • Communication is key

  • Diesel procurement contract negotiating is a vital role of trucking companies

  • Precise scheduling


Christina Forth
FFAF Cargo

“The types of skills you need in this industry are to be very organized, very time sensitive… reliable, responsible; those things you always look for in employees.” —Christina Forth

  • A high degree of coordination is vital for freight forwarder portions (obvious)

  • Ethnic diversity is useful in understanding the cultural norms at play within geographic locations being served

  • Fast-paced and stressful environment


Jim Gillespie
Director of Programs

“If you’re interested in a full career, starting in supply chain, pick that part of the job that you love, get into that part of the job, work with others, but expect to stay at that level unless you’re willing to learn what all the other elements do. That’s the only way that you can grow into the leadership and turn it into a full career. Because it is very rewarding, very challenging and there’s going to be lots of room in this industry coming up.” —Jim Gillespie

  • Maintenance is the core of the supply chain

  • Cross-functional team management is paramount to this position

  • A military background is not necessary to work on military grade products

  • To grow into a leader, you must master your area of expertise, then learn about all of your colleagues’ areas of expertise

Supply Chain Management

Pierre Massicotte
Senior Vice President, Operations
L’Oréal Canada

  • Supply Chain Management plays a strategic role in the distribution of consumer cosmetics

  • Productivity drives competitiveness (obvious)

  • Many ingredients are imported, providing opportunities for those with logistics and customs backgrounds


Job Search
Upon recently completing my graduate certificate in Supply Cain Management – Global Logistics and the SAP Certified Application Associate – Business Foundation & Integration with SAP ERP 6.07, I applied my over 5 years of media production experience to the creation of this cover letter video. It highlights professional expertise in my former industries of mass participation event operations management and journalism, in addition to my educational achievements and certifications. I believe it provides the viewer with a solid representation of who I am, what I bring to the table and how my communications background can be beneficial to an organization’s supply chain.