Last decade there was a lot of messaging around supplier information management, relationship management, and even supplier diversity management but not much about risk and compliance, as COVID hadn’t hit yet, and very little about supplier performance management, as most organizations were still struggling just to get a handle on who their (active) suppliers were. However, while there has been a lot of talk about the value of relationship management for two decades, the reality is that there is no value in just relationship management. All relationship management does is ensure that there is communication around issues, contracts, etc.

The value of an SXM system comes from an improvement, and that requires performance management if the value is limited due to poor performance; risk management if the lack of value is due to multiple disruptions over the course of the relationship; and compliance, if lack thereof is resulting in unsaleable goods or unusable services. However, there is no value from your supplier being happy with the relationship. They might be easier to work with, but what’s the dollar value of that? Zero. 0. Moreover, are they happy because you are a good customer or are they happy because they’re charging you extortion prices and you are paying them while being blissfully unaware? (Now, that’s not the supplier’s problem, as it was your sourcing team’s problem for not doing their market research, but, again, it’s not indicative that you have a good, valuable, relationship.)

Fortunately, there are a (select) few providers that offer performance management, and one in particular is SupplyHive, which, unlike many of it’s peers, ONLY does Supplier Performance Management (as that’s where they see the largest market need, and they can easily integrate with other systems for those organizations that want a more holistic supplier management solution). Founded five years ago by ex-CVM founders (who basically defined the SaaS-driven supplier diversity space before it was a thing), they now have 25 Fortune 1000 customers across multiple industries (including a number of really big names whose products you likely use or consume regularly). They have these customers because they not only support customizable performance analysis down to the supplier plant level or service level on a role or project basis, but can do holistic performance analysis across products, ESG, risk, compliance, personnel, and any other factor you want to consider and have the data for. (Which can come from existing systems they will integrate with, third party feeds, or supplier surveys … but it’s really best to use third party or measured, objective, data and keep the surveys for supplier 360 surveys where you ask your team to rate the more subjective aspects of the relationship and you ask the supplier to rate how well they think they are doing on more subjective factors, or metrics translated to a 1 to 100 percentage, and see how their view of performance differs from your organization’s.)

Furthermore, and this is not surprising if you are familiar with the niche supplier management specialists in the SXM space, the majority of their clients and prospects have (SAP) Ariba, Coupa, Jaggaer, or another major suite and not a single one of these use their supplier management modules (because, while it’s important to know who all your active suppliers are, and have this information in one common location, there is no value paying six figures a year for a supplier information database when you can literally get one for 99£ per user per month). The value comes in being able to do something with that data. (So you need to add risk modules, compliance modules, ESG modules, etc. etc. etc. This can greatly inflate a suite price, and often you only get last generation modules in many cases. (Remember that Ariba was built around Procurement. Coupa was built around Procurement and its next strongest modules are Advanced Sourcing [Trade Extensions acquisition], Spend Analysis [Spend360 acquistion], etc. Jaggaer, formally SciQuest, was built around Procurement and acquired a number of companies in the early days to flesh out its solution, and eventually BravoSolution for Spend Analysis and Sourcing [in Indirect, Services, Projects, etc.] and Pool4Tool for Direct Procurement. While many of these have fairly extensive SXM offerings if you buy all the modules, none of these started in SXM and definitely not in SPM/SUM.)

On the flip side, SupplyHive, which is a best-in-class information management solution (because you need information for performance), was built for performance. And it was built with four goals in mind, which they have now achieved:

1. meaningful scores that convey (relative) supplier performance at a glance with drill down to raw data
2. drillable performance scorecards that go right down to the individual plant, and project, level if you desire
3. meaningful, AI-summarized, feedback and auto-generated reports that can be sent to the supplier as a basis for discussions
4. embedded action plans, which are auto-suggested and can be kicked off automatically upon a score falling below a threshold or a supplier discussion

as they saw the following problems with every traditional SRM, solution, including those that had single-level survey “performance”

1. a random score on a random scorecard is meaningless; the score needs to cover the representative dimensions across meaningful scorecards with appropriate weightings; and while a company may have the expertise to build a scorecard across some dimensions, they will need best practice guidance across others
2. a high level score hides the truth; you’ll have exceptional plants/projects and dismal ones, but they will cancel out and you’ll be left with an average, which you will think signals all things fine [but it’s even worse than that, a score is not a score is not a score as there will always be differences by location, product, and project and unless you have all the data and all the details, you’ll never get the full picture of where there is the most opportunity for improvement, where there is the least, when a supplier is one you want to consider consolidating too, and when a supplier is one you want to take business away from until they get matters under control]
3. while a scorecard may be meaningful to a buyer, except for the 360-view (which summarizes the gap between the supplier’s viewpoint on their performance versus the buyer), it’s not meaningful to the supplier — they need plain english and focus on key areas they need to improve
4. just like relationship management doesn’t actually increase value, performance doesn’t increase value unless you do something to improve that performance

Thus, SupplyHive built a platform that has four main parts:

• Your Hive (MyHive): which centralizes access to your (open) surveys, action plans, and scorecards
• Suppliers: which centralizes access to your suppliers, their profiles, and the high-level matrix with the supplier’s hive score
• Hive Analytics: where you can drill into supplier scorecards (by area), benchmarks, the Hive360° breakdown, and the quadrant view (which is good for sourcerers)
• Configuration: the administration section that allows everything to be configured to the needs of the organization

Let’s start with your Suppliers.

SupplyHive has an Open API, so it is easy to pull suppliers from another system or push them in if your current supplier master has configurable API-driven pull or push capabilities. If not, or you don’t want to deal with IT or the implementation lag, it’s very easy to load the database of suppliers from a flat file (which all of your systems should be able to generate) and then do the integration later. (And, finally, for ongoing supplier maintenance, it does support new supplier profile creation through form-based entry like every SXM system on the market.)

The primary entry point in SupplyHive is the supplier matrix where you see a quick snapshot of your suppliers and their overall hive score; performance and relationship indexes; quality, value, customer service, and CSAT stores; as well as the number of (completed) project reviews and associated supplier spend (which needs to either be pulled in from the ERP/AP or manually entered).

The search tab allows you to search suppliers by name, location, or other detail in their profile. Selecting a supplier brings up their scorecard summary by default (as the platform is focussed on performance), which can be configured to include an overall AI generated summary or a customized performance dashboard, and from there you can click into the scores and drill into the Hive Analytics or drill into the supplier profile. The profile has everything you would expect out of the box including, but not limited to:

• basic company details (including, but not limited to, categories, client accounts, divisions, regions, etc.)
• location details
• contracts & identified risks
• diversity profile
• digital QBRs
• sustainability
• safety
• SRM framework
• issue trackers
• innovation hub

and if that’s not enough, the buying organization can add as many tabs as it wants (and hide or remove tabs it doesn’t) as well as adding as many fields as it wants to existing tabs) in the configuration section, where each tab can include as many standardized attributes (also defined in the configuration section) as desired.

Now let’s move onto the Hive Analytics, starting with the scorecards. Scorecards work as you would expect, they have a number of dimensions, scored on a scale (that can be converted to a quantitative number), that can be weighted to compute a total score. The default scale is out of 100, but any scale can be configured. The big difference with Hive Analytics is that they are not supplier level — they are fine grained down to the project at the plant / location level, and then rolled up to the plant / project, to the region, to the supplier (or to the plant, to the country, to the region, to the category, to the brand, to the supplier, etc. — depending on how granular the organization wants to measure performance). They are based on either survey data (filled out by organizational stakeholders, supplier stakeholders, or both) or imported third party risk/compliance/metric data (as the platform is not a risk, compliance, or [financial] metric platform).

Out of the box, the platform can be configured to include a number of survey templates for each industry and major category, but SupplyHive prefers to work with its clients on configuration to customize the templates based on the primary categories and projects the client is addressing in its initial performance projects, that start with the top 60% to 80% of spend and the top 10% to 20% of active suppliers.

In addition to scorecards, which are associated with a date, and which can be filled out by multiple individuals, there is a trend view that allows the organization to see how the supplier’s performance score changes over time.

As noted above, the platform supports Hive360° where the supplier can be invited to self-score, and then the platform will show the difference between the buyer score and the supplier score. It’s not just your view of performance that is important, it’s the supplier’s view. If the supplier believes they are performing a lot better than you think they are, then their performance review should likely take priority over others, especially if they are considered a strategic supplier while the other suppliers with a similar performance score are providing commodities or non-strategic products and services where you can live with mediocre performance (as long as the supplier recognizes that’s the level of performance they are providing you with).

Benchmarks allow you to compare supplier performance to an organizational defined baseline which can be based on average supplier performance for the category or industry or a snapshot of past supplier performance.

When it comes to action plans, they work as you would expect, with a bit of a twist. There are three ways to generate action plans:

1. fully manual
2. platform recommendation of existing templates (with titles, goals, and action steps) using the metrics, trends, and user feedback that can then be customized
3. AI-generated from uploaded documents — which can include call transcripts, project specifications, issue documentation, etc. — context, and goals

In each instance, you can accept or modify the steps, define due dates and owners and approvers for each of the steps, launch it, and track the progress over time.

We’ll quickly mention the new innovation hub where buyers can issues challenges and suppliers can submit ideas, and which allows the buyers to manage those submissions through an intake to execute process that organizes ideas by category and type and tracks the status of each one.

Finally, the Quadrant View, which can be used to plot any two dimensions or supplier KPIs against each other, can be used to plot the (overall) supplier score by supplier spend (with drill down capability) to help those organizations identify high spend suppliers with low performance that may need immediate action relative to performance; or to identify high performance suppliers with low spend that an organization may want to move business to; or to identify low-performance low-spend supplies which could simply be eliminated from the organization’s supply base in an optimization project. (Optimization, not rationalization, as it’s not always the fewest suppliers, it’s the right number by region and category that deliver the right value and performance. The right number for a category could be 2 suppliers or it could be 22 suppliers.)

The most unique aspect of the performance application is the supplier performance summary which is not just a roll up of the scorecards, but an AI-generated supplier snapshot that includes an overall performance summary in plain english, suggested supplier action plans, the story behind each score (key issues in plain english), suggested action plans tailored to improving that sub-score, and a gap analysis on the Hive360°. The platform also allows the user to output a PDF report with all of the information to send to the supplier before a supplier performance review to help both parties get on the same page. Also, it’s single click for a buyer to kick off an action plan with a supplier with the goal of helping the supplier improve their performance.

In terms of the Roadmap, they are working on three major enhancements:

• Anonymized Community Performance Direction Data: where they use anonymized community data to enhance common supplier profiles with directional performance data (to help buyers understand which suppliers are improving when doing discovery and which suppliers are not, or might be in trouble, when considering renewals)
• Automated “Boost your Hive Score” Recommendations and action plans where they let a supplier know that if they can do actions / action plan X by date Y, it will increase their score for a buyer
• Detailed Performance Insights where, going back to where the doctor said a score is not a score is not a score bubble up the best and worst performance across a supplier’s categories, locations, and projects and, over time, identify what a supplier is consistently good at (and improving) and not good (and worsening); for example, they did an analysis across one of the Big X consultancies and pretty much discovered something leading analysts in the space already know (but most won’t write about, but, as you know, the doctor, who told you NOT to hire a F6ckw@d from a Big X for an Analytics project, will), that the certain Big X consultancy in question only consistently performed well on:
  • high dollar projects (which get the attention of the few, talented, high paid team leaders)
  • quick hit projects (that they can complete quickly with the few high performing assets they have and then reassign the team to another overpriced project)

With respect to implementation, most of their customers are up and fully running on the platform in 30 to 60 days, which includes the creation/import of all starting supplier profiles, the selection and customization of attributes, scorecards, organizational categories and hierarchies, users, training, and initial project creation. Implementations that require IT or a third party might take longer, but if the connection points have Open APIs, those are typically configured in days.

So, if you are a larger organization where supplier performance is a serious concern, and an even more serious manual effort (where your team is breaking under spreadsheets), consider checking out SupplyHive at your earliest convenience. (Especially if your QBRs are taking an average of 45 days of prep time, as SupplyHive will reduce that to less than 5 days of prep time, a 90% savings! Most of their clients are currently seeing a 6X to 10X ROI from the manual effort reductions alone, which also allows them to put more than just the top 100 suppliers under management, with many organizations quickly progressing to 500 to 1000 suppliers under ongoing performance management and monitoring.)

Just like CVM took off over a decade ago, this next phase of specialized supplier management application is about to take off again because organizations need value from their suppliers, and relationship management alone is not enough. (You should consider checking them out sooner than later. Once the market realizes how critical supplier performance management is to cost management in the new age of supply chain cost unpredictability, given how few supplier performance management solutions are on the market, we expect that you’ll go from getting their attention to waiting in a queue.)