2. Set performance evaluation processes. In addition to KPI and performance metrics being established, standards and thresholds need to be set. If a supplier achieves a certain level of performance, what will be the outcome? Will it mean reward or disengagement? These are the type of questions that need to be decided before performance managers begin working with suppliers on scorecard results.
3. Work actively with suppliers. Taking action with suppliers is perhaps one of the most important steps in an effective supplier performance management program. From the service level agreement (SLA) to contract re-negotiations, performance managers must communicate with suppliers. This will provide insight into how improvements have been made in some areas and where lacking areas can be improved, as well.
4. Share performance results internally. Performance data is beneficial to more than just the performance manager – this data can be used by inventory departments, financial analysts and other executives to improve both the supply chain. However, this depends on the the availability of this performance data. One of the most popular discussions right now within the supply chain community is how to better outfit risk management departments. One key way is for these departments to have access to supplier performance data, so they can assess where their supply base may be susceptible to financial diaster.
For more discussion on these four strategies, check out: Four Best Practices to Improve Supplier Performance Scorecarding.