Youâ€™re struggling to manage your supplier performance. Whatâ€™s the best way to get back on track?

Managing your supplier performance is crucial for your business success. You need to ensure that your vendors deliver quality products or services, on time, and at a fair price. But sometimes, things go wrong. You may face issues such as delays, defects, disputes, or dissatisfaction. How can you get back on track and improve your vendor relations? Here are some tips to help you.

1 Assess the situation

The first step is to identify the root cause of the problem. Is it a one-time incident or a recurring issue? Is it related to a specific supplier or a general trend? Is it affecting your operations, your customers, or your reputation? You need to gather data and evidence to support your analysis. You can use tools such as scorecards, surveys, audits, or reports to measure and monitor your supplier performance.

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Manmeet Singh Kohli (MSK)

Strategic Sourcing|Supply Chain Development | Business Analytics | Logistics| Sustainability
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Be a part of suppliers' own daily operations on your orders at their factory/ site/ bay for, may be, a week or more depending on the criticality of the order placed. Observe from a "bird's eyes view." perspective. This will impart clarity on what activity(ies) on critical path are actually concern worthy. It could turn out to be a wide variety of reasons impacting the performance of any supplier (Economical, Statutory, Environmental, Resourcing so on so forth) Find the relevant root cause(s) and take mitigation steps, probably make a future WTO to avoid recurrences. Post-implementation of CAPA monitor and hand-hold supplier(s) until the performance bounces back on track.

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Vineet Gupta

Contract Manager at Bharat Heavy Electricals Limited l Contract Management l Supply Chain Management l MBA Consultancy Management-BITS PILANI l B.Tech (ME) l 16 Years of Experience in Maharatna PSU and Private Sector
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We need to visualize the situation and find reason behind this with root cause analysis. We can gather data by taking feedback from suppliers. Their degraded performance can deteriorate the whole crux of Supply Chain Management. Each and every part of chain has to be in win win situation. The issues need to be addressed to all stakeholders in organization to brainstorm the solution that can improvise the experience and performance of suppliers.

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2 Communicate clearly

The next step is to communicate with your supplier and share your feedback. You need to be honest, respectful, and constructive. Explain what the problem is, how it impacts you, and what you expect from them. You also need to listen to their perspective and understand their challenges and constraints. You can use tools such as emails, calls, meetings, or contracts to communicate your expectations and requirements.

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3 Collaborate effectively

The third step is to work with your supplier to find a solution. You need to be flexible, creative, and cooperative. Explore different options and scenarios that can benefit both parties. You also need to set clear goals, timelines, and responsibilities for the implementation. You can use tools such as action plans, checklists, or dashboards to track and manage the progress and outcomes.

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4 Review regularly

The fourth step is to review your supplier performance and relationship regularly. You need to be consistent, objective, and proactive. Evaluate the results and impact of the solution and provide feedback and recognition. You also need to identify any gaps, risks, or opportunities for improvement and address them promptly. You can use tools such as KPIs, SLAs, or reviews to measure and improve your supplier performance.

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BRIJRAJSINH JADEJA

Procurement Officer | Operational Lead INDIA @ GIS International | Inventory Management
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A good way to start is to evaluate all the vendors in database for the On time Delivery % (Ratio of Difference between first commit and actual delivery date to Total orders). This will bring many action items for your team to work with vendor. You can start by the Top 10 vendors to communicate the issue that you so and in some cases explaining the vision that you possess. It surely helps.

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5 Learn continuously

The fifth step is to learn from your experience and apply the lessons to your future vendor relations. You need to be open, curious, and adaptable. Reflect on what worked well and what didn't and why. You also need to share your insights and best practices with your team and other stakeholders. You can use tools such as reports, case studies, or training to document and disseminate your knowledge.

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6 Leverage technology

The sixth step is to leverage technology to support your supplier performance management. You need to be smart, efficient, and innovative. Use software or platforms that can help you automate, integrate, and optimize your vendor relations processes. You also need to choose the right tools that suit your needs, budget, and goals. You can use tools such as ERP, CRM, or SPM to streamline and enhance your supplier performance management.

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7 Hereâ€™s what else to consider

This is a space to share examples, stories, or insights that donâ€™t fit into any of the previous sections. What else would you like to add?

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Directory

Youâ€™re struggling to manage your supplier performance. Whatâ€™s the best way to get back on track?

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1 Assess the situation

2 Communicate clearly

3 Collaborate effectively

4 Review regularly

5 Learn continuously

6 Leverage technology

7 Hereâ€™s what else to consider

Vendor Relations

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