Measuring Supplier Performance

Collection and analysis of performance data are the basis for determining how good a job the supplier is doing.  Normally, the performance of the supplier is assessed regularly to reveal cycle time reduction, opportunities for process improvements, cost reduction, and quality and service improvement.  Regular performance assessment is a catalyst for continuous improvement.

 

  • Key Supplier Performance Indicators – are direct measures that quantify supplier performance at the time work is completed.  The supplier scorecard may include a summary statement of the supplier’s cost, quality, and timeliness performance and a compilation of satisfaction surveys, real-time metrics, variance of invoice amounts, and so on.  Most supply professionals tend to separate suppliers into two categories: new and current.  A new supplier is one about which no track record is available.  This is a supplier new to the buying organization and is in the process of ate,pting to meet its obligations under the first contract.  The new supplier can be considered probationary and will normally be watched closely to ascertain whether preselection expectations warranted awarding the business.  Fro current and longer-term suppliers who have already proven in the past that their performance meet minimum expectations, the evaluation of their performance may be more routine.