Purchasing Best Practice # 3: Managing Supplier Performance
PurchTips edition #21
By Charles Dominick, SPSM, SPSM2, SPSM3
How Are Your Suppliers Performing?
Supplier performance is critical to an organization. A supplier that performs well can help an organization be
more efficient, produce higher quality products or services, reduce costs, and increase profits. A supplier that performs poorly will have the opposite effect. Therefore, it is obvious that measuring and managing supplier performance is one of the most important responsibilities of a purchasing professional.
Do you have a supplier performance rating program in place? If not, here are some insights associated with the five important decisions of implementing a supplier performance rating program.
- Which suppliers will you rate? Consider rating those suppliers with whom your organization spends a lot of money as well as other suppliers who can have a significant impact on your operations.
- What personnel in your organization will participate in the rating process? In addition to the purchasing staff, don't forget to include end users and stakeholders.
- What performance measures will you use? Use metrics that are aligned to the measurements used to gauge the success of your organization.
- How will you collect performance data? Implementation speed, IT support, and data integrity are among the many factors to consider when selecting among the four most popular data collection methods.
- How will you use performance data? Performance data must be used to reward good performance as well as to correct poor performance.
Do You Want a More Rewarding Procurement Career?
Are you tired of not getting enough opportunities, respect, and money out of your procurement career? Well, guess what? Nothing will change unless you take action towards becoming a world-class procurement professional.
Earning your SPSM® Certification is the action to take if you want to bring the most modern procurement practices into your organization and achieve your career potential. Download the SPSM® Certification Guide today to learn how to get started on your journey to a more rewarding procurement career!
Need Better Performance From Your Procurement Team?
Are you a procurement leader whose team isn't achieving the results you know are possible? Maybe it's not enough cost savings. Or frustrating performance from the supply base. Or dissatisfied internal customers.
You need a performance improvement plan that's easy to implement and quick to produce results. The NLPA can help.
Download our whitepaper "The Procurement Leader's Guide To A More Successful Team." You'll learn the 7 steps for transforming your staff into a results-producing, world-class procurement team.
Are You Getting The Most Out of Your NLPA Membership?
Members of the NLPA get more than just articles like this by email. As a member, you also get access to:
- The Procurement Training & Certification Starter Kit
- The latest Purchasing & Supply Management Salaries Report
- Leading-Edge Supply Management™ magazine
- Members-only webinars 10x per year
- And more!
If you haven't been taking advantage of these benefits, why not log in and start now?
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