Fumbles (or inconsistent business performance) occur daily in the sport of business. Consider the following:

  • Unnecessary outsourcing
  • Inaccurate data
  • Dysfunctional execution
  • Bad fit supplier relationships
  • Poor project level performance
  • Over-priced services
  • Inefficient operations
  • Delayed results

The reality is most enterprises plan to increase the scope of their outsourcing. However, without the proper controls in place, unknown fumbles will undermine the supply chain, the value promised to customers, and ultimately profit.

That is, of course, unless an organization has the appropriate controls in place – controls that enable the organization to always be in the know regarding supplier performance.

A study of “in the know” controls across the Fortune 1000 revealed some interesting realities:

  • Less than 10% can access real-time, stakeholder reviews of supplier performance
  • More than 80% rely on QBR (quarterly business review) discussions to gauge supplier performance
  • More than 75% use annual surveys to gauge stakeholder opinions of supplier performance

In short, supplier performance feedback processes are undermined by one of four scenarios:

Scenario #1 – No Feedback Process

Some organizations simply do not have a feedback process in place. Thus, there is no awareness for how their stakeholders feel as customers of the suppliers they rely on. Imagine the amount of unaddressed waste that is simmering within and across these supply chains.

Scenario #2 – Anecdotal Feedback Process

Some organizations rely on anecdotal feedback (biased awareness)… “we have strong relationships with our suppliers, and if an issue arises, we discuss it right away.” This approach is suitable for a local hardware store, but no amount of talking is going to provide end-to-end, January – December visibility across the supply chain of an enterprise.

Scenario #3 – Annual Survey Process

Some organizations recognize the value of listening to stakeholders. But they only distribute annual stakeholder surveys. The question is, will point-in-time awareness provide the visibility required to identity and remove waste from the supply chain of an enterprise?

Scenario #4 – Time-intensive Feedback Process

Lastly, some organizations recognize the value of stakeholder feedback on supplier performance, but execute via time intensive feedback processes. Albeit a step in the right direction, the delayed awareness is not responsive enough to drive informed decisions about ways to strengthen supplier performance.

To learn more about the risks of unidentified waste due to poor supplier performance, download the following white paper:  How to Avoid the Supplier Relationship Gap