6.1 The Supplier Scorecard
Aerospace buyers evaluate suppliers using structured scorecards that quantify performance across multiple dimensions. Based on QSTRAT's analysis of industry best practices [4]:
Typical Aerospace Supplier Scorecard Weighting
| Evaluation Category | Weight Range | Key Metrics | Threshold for Acceptable Performance |
|---|
| Quality | 35-40 points | Defect rate, NCR count, SCAR response time, first-pass yield | Minimum 30/40 points; below 25 triggers improvement plan |
| Delivery | 25-30 points | On-time delivery %, schedule adherence, lead time accuracy | Minimum 20/30 points; below 15 triggers improvement plan |
| Cost | 10-15 points | Price competitiveness, cost reduction initiatives, payment terms | Minimum 8/15 points; highly variable by program |
| Technical Capability | 10-15 points | Engineering support, design input, problem-solving responsiveness | Minimum 8/15 points; critical for new product development |
| Business Stability | 5-10 points | Financial health, ownership changes, key personnel retention | Minimum 4/10 points; red flags trigger enhanced monitoring |
Source: QSTRAT Supplier Qualification Best Practices in Aerospace
[4]6.2 The 90-Day Improvement Plan
Suppliers who fall below acceptable performance thresholds typically face a structured improvement process [4]:
Day 1-30: Formal notification of underperformance, root cause analysis required, corrective action plan submission
Day 31-60: Implementation of corrective actions, weekly progress reviews, potential on-site audit
Day 61-90: Performance validation, decision on continued supplier status, potential probation or disqualification
Post-90 Days: If performance does not improve, suppliers face probation, reduced order allocation, or complete disqualification from the approved supplier list.
6.3 Payment Terms and Relationship Dynamics
Payment terms are a critical but often overlooked aspect of supplier relationships. Reddit procurement community discussions reveal significant tension [15][16]:
Standard Terms: Large aerospace primes typically offer Net 60 to Net 90 payment terms. Some European suppliers report resistance to these terms, with regional standards favoring shorter cycles.
Small Supplier Impact: Net 90 terms can create significant cash flow pressure for small manufacturers. One procurement professional noted: "Net 90 is abusive for small vendors. Big corps grind vendors down" [15].
Relationship Damage: Payment delays can permanently damage supplier relationships. As one supply chain professional observed: "If 47 days invoice delay burned relationship for months, the relationship wasn't that great" [16].
Negotiation Leverage: Suppliers with unique capabilities or certified capacity in high-demand segments (like aerospace heating) have more leverage to negotiate favorable terms.
6.4 Long-Term vs. Short-Term Contracts
Contract structure significantly impacts supplier economics and relationship stability:
Long-Term Contracts (3-5 years): Provide revenue predictability but lock in pricing that may not reflect market changes. One procurement professional advised: "Given how fast AI and warehouse software are evolving, hesitant to give up long-term negotiation power for short-term discount" [17].
Short-Term Contracts (1-2 years): Allow more frequent price renegotiation but create revenue uncertainty. Better for suppliers in rapidly evolving technology segments.
Framework Agreements: Establish terms and conditions without committing to specific volumes. Provide flexibility for both buyers and suppliers.
Strategic Partnerships: For mission-critical suppliers, some buyers establish partnership agreements with joint development commitments and preferred status. These require significant investment but offer the highest relationship stability.
