Supplier Performance Monitoring

The purpose of Supplier Performance Monitoring is to:
• Clearly communicate ‘COMPANY X’ supplier performance goals and expectations.
• Jointly agree a supplier’s current supply capability and performance whilst identifying areas for improvement to meet ‘COMPANY X’’s needs.
• Provide a framework to identify performance gaps for planning improvement action.
• Capture actual supplier performance for feedback to ‘COMPANY X’ and supplier stakeholders.
• Facilitate a review of supplier performance against targets and best in class.
• Maintain a record of supplier performance against Business Requirements over time.
• Allow easy comparison of performance between similar suppliers.
When to initiate Supplier Performance Monitoring

Ideally Supplier Performance Monitoring should be outlined to potential new suppliers at the earliest opportunity. This will be in the information gathering stage of ‘PROCURMENT PROCESS’ as part of Supplier Conditioning. Full details will then be communicated in RFP/ RFQ's with formal agreement occurring within a Contract or Service Level Agreement (SLA). By positioning the principle of measurement and monitoring early in a supplier relationship, the importance of continuous improvement will be conveyed and adequate resources can be allocated to ensure ongoing professional performance management.

The tool can also be introduced into an existing supplier relationship where structured performance monitoring has not previously occurred. Senior management influence is recommended to ensure top level support to the principles of measurement and action planning for improvement. In these circumstances the tool provides a powerful means of re-focusing suppliers on current Business Requirements and priorities, reassessing their ability to deliver against these whilst assigning actions to hit higher performance levels.