Welcome back to another installment of Whitepaper Wednesday here on the Purchasing Certification Blog. This week, I’ll be reviewing a whitepaper entitled “The Business Case for Better Supplier Quality Management” from arcplan.
Because I see procurement leaders having trouble selling their management on the idea of establishing a supplier performance measurement program, I liked that this whitepaper started out by stating a large number of benefits of measuring and managing supplier quality in strategic terms. Those benefits included:
- Uncover and remove hidden waste and cost drivers that erode profitability
- Improve competitive advantage by reducing order cycle times
- Avoid stock-outs, which cause consumers to sample competitors’ products and strains your
relationship with your customers
Did you notice the references to profitability, competitive advantage, and customer relationships? Good. Those are the types of words that matter more to senior management than cost savings and on-time delivery.
That isn’t saying that cost savings and on-time delivery aren’t important because they are. They actually facilitate profitability, competitive advantage, customer relationships, etc. But management is focused on the higher-level, bigger picture end results and you should be, too.
Another thing I liked about this whitepaper was that it not only addressed the “three critical performance drivers in the supply chain – Cost, Quality, Time,” but also discussed several metrics for each, including how each metric is measured, where the relevant data resides, and the impact on the organization.
The whitepaper closed with the American Society for Quality’s Eight-Point Supplier Improvement Guidelines, which should be part of every procurement professional’s collection of resources. Certainly, this whitepaper won’t teach you everything you need to know about measuring, managing, and improving supplier quality, but it is a good primer. You can download your own copy for free from arcplan’s Web site (registration required).