Watch/listen to how to measure supplier performance, and read the overview below.

To measure supplier performance across an enterprise, you must have 3 things in place…

  • DATA… has to be quantified and qualified in real-time.
  • AUTOMATION because labor-intensive processes don’t scale.
  • COLLABORATION… to make your dashboard actionable.

How to make it happen

So how do you make all of this happen? For starters, avoid the common pitfalls:

  • Asking IT to build a solve
  • Using a module within a P2P solution

Look, IT doesn’t know jack about supplier performance. P2P solutions organize supplier information, not measure/improve it. How long has Procurement been talking about earning a seat at the table?

Too much talking and not enough profit. Seats are reserved for folks who drive profit. Hell. I had a seat as a 30-year-old despite being 2 levels below the c-suite. I knew how to drive profit.

Procurement owns the measurement and improvement of supplier performance. But at an enterprise, there are too many suppliers. Too few supplier relationship managers. So it can seem impossible to drive increasing levels of supplier performance at scale.

The Effect of Supplier Measurement

That’s why you automate the process. To automate all of the stuff nobody has the time to do. And place ownership of issue resolution onto each respective supplier. Otherwise, you end up with a log of supplier performance gaps. That doesn’t drive profit.

When you can measure and improve supplier performance, you…

  1. reduce the time your company spends cleaning up the effects of poor supplier performance.
  2. increase the productivity tied to supplier inputs.
  3. capture opportunity gains, which studies show can increase profit by 2%!

In other words, measure performance and coach ’em up or coach ’em out. Either way, more money will be put on the table, and that’s how you get invited to the table.

If you need help getting there, click here.