Global Supplier Visibility and Performance

Continued pressures to reduce costs while maintaining quality and other non-cost factors have caused enterprises to look towards outside providers. In many cases, outside providers refer to manufacturers and suppliers in foreign countries, thus adding other variability to an enterpriseā€™s supply chain. Enterprises have undertaken various efforts to manage the new variability: supplier performance, supplier visibility, supplier costing and supplier collaboration are all activities which can help.

Aberdeen has just released the 2006 Global Supplier Visibility and Performance Benchmark Report (sponsored access) that not only examines GSVP drivers, hurdles, strategies, and tactical action plans for more than 110 companies but offers solid suggestions for improving your GSVP programs.

Considering that Aberdeen has found that the average company has had an average of two major supply chain disruptions per year and that industry average and laggard companies are only able to meet customer-requested ship dates 40% of the time, the need for improved GSVP programs is becoming paramount.

Furthermore, Aberdeen found that despite all of the growing concerns regarding natural disasters, terrorist strikes, political uprisings, etc., the top 3 risks (accounting for over 75% of surveyed disruptions) are actually quality & supplier reliability, lead time increase, and the downstream effects of forecasting errors. Therefore, as I indicated in my posts on supply risk management (I: An Introduction, II: Risks and the Need for Resilience, and III: Managing Risk) and supplier performance management (I: An Introduction, II: The Road to Success, and III: Best Practices) on eSourcing Forum, there is a lot you can proactively do to minimize the chances and effects of disruptions and significantly improve your on-time delivery (by as much as 50% in some cases), and the insightful Aberdeen report is a great start if you want to take your supply chain to the next level. I recommend checking it out. I’ll be posting my own thoughts on it later.