It will be great if some body can share the steps that are followed in Supplier Performance Management. How shall the buyer ensure that the improvement plans given to the suppliers based on the performance assessments are actually implemented by the suppliers.

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There needs to be clear ownership of the contract and supplier management within your organisation. Both the supplier and customer should be familiar with their obligations under the contract - it's a two way street and suppliers will come back at you with reasons for any failure in performance if your organisation has failed in any way.

Formal performance reviews should be agreed with the supplier at set intervals, the procurement function may offer facilitation of the session for the contract customer, managing the agenda, pace and maintaining a positive approach.

Whoever takes ownership of the relationship and contract should document all agreed actions, timescales and responsible persons, then follow up with all parties, regularly.

Hi attached in the image is a process that can be used and some notes that can be helpful. (Courtesy Commerce Edge World Class Procurement Training)


Deciding What to Measure:

The decision as to what to measure will depend on a number of factors;

• The nature of the Goods and/or Service supplied
• Stakeholders demands
• Criticality to the Business
• Resources available to conduct the measurement

The key to successful identification of appropriate Supplier Measurement criteria is to employ a Cross Functional Supplier Team approach.

In order to set meaningful selection criteria, the Cross Functional Team should first decide what areas need to be analysed
The areas will depend upon the nature of what the Supplier is providing (Goods, Services etc), but should include:
Quality
Service
Commercial
Flexibility etc.

Using these categories the cross functional Supplier Management Team can then brainstorm specific areas to measure and the criteria to be employed

Using the information
Gathering information is only a means to an end. The information gathered can only be useful once it has been compared with related data/information

Other data can be secured from sources such as
Other Supplier Measurement Programmes
Same Industry Process Benchmarking exercises
Cross Industry Process Benchmarking exercises
Trade Journals and Publications
Historic Purchasing Data

Armed with gathered data and comparative data the Supplier Manager can
Track performance trends - specific to the Supplier or against Competitors
Become immediately aware of significant changes in performance
Pro actively managing problems before adverse impacts on business
Identify target areas for improvement with clear understanding of what is achievable

Attached Images

supplier management process.jpg (25.1 KB, 12 views)

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