Leveraging Performance Management for Supply Chain Improvement
Updated · Jul 01, 2010
A new article on Supply & Demand Chain Executive suggests that sharing performance measures with suppliers will align performance understanding and enable a collaborative approach to supplier management. But how do you know which vendors most effectively deliver ‘on-time, in-full’ deliveries against orders?
“Supplier performance management works best as both a daily operational process and a periodic review. However, most manufacturers miss that ‘right-time’ analysis, relying on after-the-fact reports that are delayed and siloed within one department or for one supplier. Only full transparency within the organization and with external suppliers can provide a company with a true assessment of supplier performance and work with suppliers to improve overall supply chain performance.
“In the past, supplier management was conducted as a periodic review using static information, typically a scorecard that examined primarily financial and contractual obligations. However, ongoing supplier evaluation, against criteria that include qualitative and quantitative aspects of performance, should be part of a holistic approach to supplier management and supply chain optimization.”