Supplier Performance Analysis

An organized process for managing and evaluating supplier performance intuitively.

Workflow Steps

Step 1 - Define KPIs & Create Scorecard

In collaboration with internal stakeholders, define the Key Performance Indicators (KPIs) for each major supplier and create a balanced scorecard.

Step 2 - Collect Performance Data

On a regular basis (e.g., quarterly), collect data from internal systems (e.g., ERP, quality control) and stakeholder surveys on supplier performance against the defined KPIs.

Step 3 - Quarterly Business Review (QBR)

Hold a formal QBR meeting with the supplier to discuss their performance as shown on the scorecard, celebrate successes, and address any areas for improvement.

Step 4 - Create & Track Joint Action Plan

Create a joint action plan with the supplier to address any performance gaps. Track the progress of this plan until the next QBR.

The Purpose of Supplier Performance Analysis

This workflow provides a structured way to evaluate the performance of key suppliers against their contractual obligations. It involves setting performance KPIs (e.g., on-time delivery, quality, cost, innovation) and regularly reviewing supplier performance against those metrics. This helps the procurement team to identify top-performing suppliers, address issues with underperforming ones, and make data-driven decisions about the future of the supplier relationship.