Great supplier performance management requires more than just a scorecard. Here are four strategies to focus on to ensure your supplier relationship management program is leading to results.
Step 1 - Create scorecards around business goals
Meet with company executives to find which key performance indicators (KPIs) the scorecards should focus on. These KPIs should reflect the areas where improvement will benefit the business most.
Step 2 - Set performance expectations
What will define excellent performance? Poor performance? What is the level of performance that will result in disengagement with the supplier? This needs to be set before scorecards are issued,
Step 3 - Talk with suppliers
Performance managers should communicate with suppliers from initial agreements to contract renewal periods. Open communication channels will lead to both supplier and stakeholder success.
Step 4 - Share with stakeholders
Access to inventory information will help improve other areas of the supply chain. Supply chain risk, for example can greatly benefit from performance data - but they need access to scorecard data to do so.
For more on this discussion, check out SRM Software Advice’s blog post: Four Best Practices to Improve Supplier Performance Scorecarding.