Definition
The decimal parameter 0-10, ICL uses to calculate the supplier's performance buffer: the higher the value, the higher the supplier's secure inventory of the cards; and the only way to translate the "this is not a good one" into the inventory.
In detail
The supplier performance factor is a decimal parameter from 0 to 10 that ICL uses to calculate the supplier performance buffer; the larger the value, the higher the safety stock for the corresponding card. It addresses the inventory risk caused by differences in supplier reliability, translating "this supplier is unreliable" into the sole channel for inventory adjustment. Unlike supplier evaluation, it directly affects inventory calculations, and its output is the adjusted safety stock level.
Example in practice
A supplier had low on-time delivery performance and frequent delays. In the electronic kanban system, the supplier's performance factor was set to 8, and the system automatically increased the safety stock for their corresponding components. Although this increased inventory costs, it reduced the risk of stockouts and improved overall supply stability.