Supplier Programs

Assessing Supplier Programs Success

Companies are increasingly outsourcing key operational processes. Therefore, their performance is increasingly dependent on the performance of their suppliers. Rigorous assessment of suppliers’ performance and then acting on the findings will lead to improvements in the key performance metrics of time, quality, cost, and technology. The Supplier and the Customer should participate in the assessment process, since both have a stake in the success of the relationship. Surveys should be conducted on mutually agreed-upon internals, such as reaching specific milestones, or on a regular basis, such as quarterly.

Challenges include:

• Building a more productive and effective supplier relationship

• Understanding that analysis of the relationship is just as important as relying on external performance measures (e.g., defect rates, inventory turns)

• Ensuring that communication is frequent and clear between the parties

• Managing multiple supplier relationships to achieve corporate goals

• Supplier strategy, processes, and business practices must align with those of their customers

• Having metrics in place to track performance of each partnership and ensuring that they are used

• Ensuring increased productivity across all channels to better serve customers

 
Our Solution delivers:

• Supplier/Customer feedback: status of relationship, ease of doing business with each other, responsiveness, working collaboratively, identification of and reasons for problems,  overall satisfaction

• Operational data: purchased parts lead times, inventory turns, parts-per-million defect rates,  delivery times, quality of products shipped, ability to scale operations

• Financial data: costs per supplier, pipeline data, value of business by month

• Reporting: strengths and weaknesses by supplier, comment analysis, value of business by supplier

• Best Practices in supplier assessment programs and dashboard reporting

 
Business Justification includes:

• Increase in competitive advantage by reducing order cycle times and inventory

• Suppliers’ and Customers’ assessment of each other’s performance uncovers any problems in the relationship other

• Ability to scale efficiently while retaining quality output

• Highlights strengths and weaknesses in current processes in order to build on strengths and deal with weaknesses

• Visibility into progress on meeting KPI targets, so that corrective action can be taken in time to meet contractual obligations

• Ability to create better contracts

• Risk mitigation

• Awareness of Supplier capabilities and capacity

• Cost reductions by minimizing rework

• Money saved by reducing inventory carrying costs

• Improved overall quality of end product

• Identification and removal of hidden waste

• Insight on how to best leverage the supply base

• Alignment of business practices between Supplier and Customer