Sometimes you need to engage one supplier to get access to another. But then, whose performance do you measure? A question that has come up several times recently is: how do you measure the performance of the products from value-added resellers (VARs)? Most companies are set up to measure the performance of their direct [...]
In an earlier post, I described what it takes to be an exceptional supplier. In that post, I said that good suppliers need good customers in order to enhance, even permit good performance. While the capabilities of supplier firms is important, so are their customer’s performance, business relationship and interactions with suppliers. Many supply managers [...]
Outsourcing is, of course, quite a common practice these days. How many companies have not jumped into outsourcing? I was reading the classic list published by Supply Chain Digest: 40 Risks and Mistakes of Supply Chain Outsourcing and stopped at the first mistake: Outsourcing undesirable functions versus the ones that provide greatest competitive advantage. This first [...]
When setting up a supplier performance management (SPM) process, procurement and supplier managers have often asked me which suppliers they should evaluate. Should they focus primarily on the suppliers with whom they spend the most money? Should they try to measure a large portion of their supply base? There is no quick answer other [...]
Sometimes it pays to state the obvious. Here are some insights into managing supplier relationships and supplier performance that you may have heard. Maybe you don’t even agree. But to me, they are essential to understanding how to improve supplier performance.
1. Treat supplier like peers, not subordinates. As it turns out, customer firms don’t [...]
Smaller companies often do not believe that they can do much about evaluating and managing supplier performance. The oft-repeated phrase is, “We can’t because we’re small.” However, I’ve found the reverse is true in many cases: We can because we’re small. Smaller firms have an ability to be agile and move quickly, unimpeded by [...]
There’s a new article on the eSourcingwiki, Understanding and Improving Supplier Performance. The wiki paper is also available for download on this page. It’s a good overview of the benefits and process of supplier performance management. If you haven’t read my book yet, this article provides an overview of some of the key concepts in it. In general [...]
Recently I was asked about how many suppliers are typically monitored and measured, on average, using a supplier performance management (SPM) system or solution and whether there is a best practice. I have never come across a best practice in terms of numbers of suppliers to measure.
I know of one large company that was [...]
Subscribers to the Value Chain Group site may now download Chapter 1 of Supplier Evaluation and Performance Excellence: A Guide to Meaningful Metrics and Successful Results. This download includes:
Table of Contents Preface Acknowledgements About the Author Chapter One — Introduction, including why the book was written and the business case for supplier performance [...]
I’ve discussed previously how supplier performance metrics work best when they are aligned with and support overall corporate goals and strategies and reasons why they can fail. But the challenge remains of how to tell whether you’ve come up with a good metric. There are many ways to look at a metric to judge how [...]