PurchTips - Edition # 229
Supplier Management: Make It Strategic
By Charles Dominick, SPSM, SPSM2, SPSM3
Is Your Supplier Management Strategic Or Not?
If you are considering implementing a supplier management process at your organization, you may wonder where to start and what metrics to choose. It's critical to begin strategically because early decisions are the foundation for all future supplier management work.
Your metrics "should relate to what your company is doing, not what some other company is doing," according to Sherry Gordon, the President of the Value Chain Group, a consulting firm that specializes in supplier management process design and development, and contributor to the Spend Matters blog. "While I think it is really helpful for companies to find out what other companies are measuring on their supplier scorecards... it's only useful up to a point because another company's metrics may not be relevant to you or even readily available in your company."
For example, if your organization's strategic priority is to increase customer satisfaction to support sales growth, it may not be smart to copy the scorecard of an organization that is more focused on cost reduction and stemming losses due to declining revenue. With two different strategic priorities, those organizations' supplier scorecards and metrics should look different.
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