Four helpful indicators of supply quality are:
- perfect purchase order percentage (PPOP),
- supplier fill rate (SFR),
- supplier satisfaction index (SSI), and
- matching rate of receipts and purchase orders.
Perfect Purchase Order Percentage
The perfect purchase order percentage (PPOP) is the percentage of all purchase orders that are delivered perfectly. A perfect purchase order arrives on-time, without damage, with perfect documentation, at the right location, with each line item request completely satisfied with the correct item in the correct quantity. This indicator should be closely monitored for each vendor and vendor location. It is not unusual to find perfect PO percentages below 50%.
Supplier Fill Rate
Supplier fill rate (SFR) measures the percentage of demand satisfied by a vendor. It can and should be measured as order fill, line fill, and unit fill.
Supplier Satisfaction Index
The supplier satisfaction index (SSI) is an overall indicator of a supplier’s performance incorporating a variety of factors typically including the elements of the perfect order percentage along with less quantifiable factors such as general responsiveness, honest, and service attitude.
PO to Receipt Matching Rate
The matching rate of receipts and purchase order records the percentage of receiving lines that match the delivery timing and quantities specified on the purchase order.