Supplier Performance Management (SPM), which is defined in Wikipedia as a business practice that is used to measure, analyze, and manage a supplier’s performance to reduce costs, alleviate risks, and drive continuous improvement is extremely critical now that inflationary times are back, supply risk is reaching new highs every year, and GDP growth is minimal or flat around the globe. For some organizations, it’s the difference between life or death.
It’s a critical aspect of Supply Management, and one your organization should have a good grip on. If your organization is new to the SPM game, there are two great, free, resources that can start it on its journey.
The first resource is the Supplier Performance Management wiki-paper, which overviews the basics of
- Creating an Effective SPM Process,
- Aligning SPM to the Organizational Goals,
- Choosing the Aspects of Performance that Will be Measured,
- Segmenting the Supply Base for Optimal Application, and
- Creating an Evaluation Strategy.
The second resource available to you is the Free Express Course from Next Level Purchasing on Managing Supplier Performance. This short course, sponsored by Sourcing Innovation, is free for all Next Level Purchasing Association (NLPA) members and teaches you how to:
- develop powerful performance measures,
- articulate the criticality of supplier performance,
- select suppliers for a supplier evaluation program,
- involve internal stakeholders in the supplier evaluation process,
- decide between supplier evaluation methods such as supplier scorecards and system metrics,
- determine if Supply Chain Event Management software will work for your organization,
- reward suppliers, and
- correct poor supplier performance.
To access the course, simply sign up for a Free NLPA Basic Membership. Both of these SPM resources are worth your time.