A recent article from ChainLink Research noted how never before have companies been so dependent on the performance of their suppliers as a result of today’s companies becoming so lean, fast, and outsourced that monitoring and responding quickly to deal with and continually improve suppliers’ performance has become a key determinant of success or failure. This article on Supplier Performance Management had a number of great tips for managing supplier performance, including the following:
- Automatic Initiation of Corrective Action Workflows
Not only must metrics be tracked rigorously, but they must be fed into monitoring systems that immediately notify the responsible individuals and start a corrective action workflow as soon as an issue is detected or a downward trend is identified. Hiccups must be addressed before they balloon into major supply disruptions, not after.
- Reverse Rating
Just thinking you’re a great customer doesn’t make it so. You might think that your performance exceeds the performance you expect from your supplier, but it might be the case that nothing could be further from the truth. The delivery might be late because your people kept the driver waiting for two hours while they prepared to accept the delivery. The shipment might be late because you only gave two days notice of significantly increase demand and not the two weeks you agreed to in the contract. Sometimes your processes are just not best practice … and sometimes your supplier knows ways you can improve them. Etc. Take your medicine and your overall supply chain health will improve.