Do you manage a lot of suppliers? If so, then supplier performance can create challenges:
- Knowing how your stakeholders define supplier value.
- Identifying which suppliers understand your stakeholders’ definition of value.
- Being alerted, sooner rather than later, when supplier relationships are at risk.
Hence the need for supplier performance feedback data. I’m not talking about operational parameters that provide data – Contracts, SLAs (service level agreements), and QBRs (quarterly business reviews). I’m talking about relational data.
What’s Relational Data?
Relational data explains how your stakeholders “feel” about the performance of your suppliers. While some are quick to dismiss “touchy/feely” metrics, the same persons are ready to pull their hair out when a stakeholder with influence irrationally pulls the plug on a supplier relationship.
“The key to good decision making is not knowledge. It is understanding.” —Malcolm Gladwell
Most suppliers are not calibrated to their customers (your stakeholders) expectations.
Absent of metrics that reveal which suppliers “don’t get it”, things can become irreparable. To minimize these scenarios, distill your supplier performance data using these five steps:
- Standardize feedback questions across supplier categories. (more on that here)
- Create a supplier performance health score that works across categories.
- Share feedback results using a standard dashboard.
- Make sure non-data hounds can understand the dashboard.
- Collect stakeholder feedback on supplier performance as often as you can. (more on that here)