Supplier Management — 4 calculators

Default weights (Price 25, Quality 25, Lead-time 20, Service 15, Reliability 15) are a starting point. If you sell perishables, bump Reliability up. If you sell commodity industrial parts with multiple substitutes, bump Price up. The tool makes this explicit instead of pretending weights are universal.

Subjective scoring needs a rubric. "Service" without a rubric is whatever the last person who got yelled at scored. Use: response time in hours, RMA turnaround, willingness to do small custom orders. Convert each to a 0–100 with a written rule.

Score once per quarter, not once per crisis. The value of a scorecard is the trend. A supplier whose Quality score fell from 90 to 70 over two quarters is telling you something even if their Price is great.

Limitations. The scorecard doesn't model switching cost. Switching suppliers has a real price (qualification, dual-running, ERP setup). If the leader is well ahead, the gap matters; if they're tied, the gap probably doesn't justify the change.

If annual demand ≥ break-even volume: take the MOQ and save. If annual demand < break-even: pay the higher unit price. If your demand is borderline: consider negotiating a smaller-MOQ contract at a slightly higher price, or co-buying with another small operator.

The 4 hidden MOQ costs. 1) Carrying cost on the units you're forced to hold (this tool models it). 2) Cash tied up that could earn elsewhere. 3) Obsolescence risk on units you may never sell. 4) Storage space taken from faster-moving SKUs.

Common error. People compare unit prices without factoring holding cost. A $0.30/unit saving on a 1,000-unit MOQ requires holding the extra units for an average of half their life — at $0.5/unit/year holding, that's $125/year that often wipes out the savings.

Limitations. Doesn't model partial use (selling the extra MOQ units at a discount through a different channel). If you have an outlet, the break-even shifts lower.

The CV of lead time is the real story. A supplier with mean=7, σ=1 is reliable; a supplier with mean=7, σ=3 is unpredictable even though their average is identical. The tool computes CV and translates it into safety stock using the same lead-time-variance model as the Lead-Time Demand tool.

When to drop a supplier. If on-time % is below 75% AND variance is high AND they're not the cheapest, the carrying cost from uncertainty is probably larger than the unit-price savings. This tool gives you the numbers to make that case.

When to keep them. A small operator with high variance but very low price can still make sense if you carry extra stock and price that explicitly into your margin.

The two silent costs: in-transit capital (you're paying for goods you can't sell yet) and return handling (often 10× the per-unit handling cost when factoring reverse logistics). Both are usually invisible on a quote sheet.

A 2% defect rate is not 2% of cost. It's 2% of units that cost you the FOB price you paid + the freight both ways + labour to inspect + labour to process the return + replacement shipping. On a $3.20 unit with 2% defect, the real cost-per-good-unit is closer to $3.45, not $3.20.

Compare TCOs across suppliers. The tool gives you a single $/unit number. When you compare two suppliers with the same FOB, the one with shorter lead time and lower defect rate often wins despite a slightly higher unit price.

Limitations. Doesn't model currency risk, payment terms, or quality-failure customer returns (a defective unit can cascade into a customer credit). For strategic SKUs, expand the inputs accordingly.