Supplier performance management measures, reviews and improves supplier delivery against agreed requirements and business outcomes. It continues after supplier selection and contract award.
Which performance areas are reviewed?
- Quality and defects
- Delivery and lead time
- Cost and commercial compliance
- Service and responsiveness
- Risk and compliance
- Innovation and improvement
How should measures be defined?
Specify the formula, data source, period, scope, target and owner. A score is not comparable if suppliers use different denominators or exclusions.
What happens in a performance review?
The parties review evidence, trends, exceptions, corrective actions and future demand. Meetings should result in named actions and decisions, not only presentation slides.
How should poor performance be handled?
Contain immediate risk, investigate root cause, agree corrective actions and verify sustained improvement. Escalate according to criticality and contract rights.
What should the buyer avoid?
Do not overload suppliers with low-value metrics or use subjective ratings without evidence. Combine outcome measures with context such as buyer-caused delays.
