Top 7 Tips For Managing Supplier Performance

The best ideas you can implement to get optimum services from your suppliers.

If you’re a firm manager, director, or entrepreneur, you would probably always have to engage suppliers who make sales deliveries or provide essential services to get things done and keep the company going.

For effective operations on the part of your company or entrepreneurship, many factors have to be put in place and measured up inefficiency, including your suppliers. Quality should be in check, rate and promptness of delivery and quantity production.

Now, how can you ensure that you get the best of services from your suppliers? Managing supplier performance may not be very easy, but it is as possible as crucial. According to this article by Ian Bryce who writers for the team at gatekeeperhq.com, when you don’t carry out proper supplier management, you are exposing your business to the risk of losing service that could well be crucial to both your business and customers as well as being penalized for lack of compliance, you could even suffer damage to your business reputation as a result.

Clearly define your expectations and benchmarks in agreement with your suppliers.

You have to make agreements that will make it clear and well defined to your suppliers what your benchmark targets are for the day, week, or month as the case may be.

Your contract would likely not be taken seriously if you didn’t make things official.

Set expectations to be met as to when to deliver, the quantity, quality, and how you want things done or supplies made. This should be done with the agreement of the suppliers to get their affirmation that the conditions are suitable and they can meet up.

It is advisable to document every agreement and contract terms for future reference rather than just ending with a talk and a handshake.

Effect a system of performance measurement

When goals have been set, proper and regular assessment using performance metrics and key performance indicators (KPIs) should closely and consistently track supplier performance. This way, you can ascertain which suppliers fault on the terms and which are more reliable in performance in the long run.

Suppliers that are aware that their performance is being monitored are more likely to sit up and make sure they perform well.

Engage your team of suppliers in improvement training

Basic training and supplier performance improvement strategies should be an integral part of your company’s plans as a customer. The training should be specific to the caliber of supplies or services you require from each supplier.

Make efforts to establish good communication with your suppliers.

If you want a long-lasting and efficient supplier performance, you should endeavor to establish and maintain a good relationship with your suppliers.

Try to communicate regularly with your suppliers to maintain a good rapport, and you could also use the avenue to make them better understand your needs as a customer and how to deliver services more effectively.

Also, make efforts to listen to whatever they have to say as hearing their opinions might make significant progress in the business relationship.

Be reasonable, predictable, and consistent.

You don’t expect perfect supplier performance when there is little or no chemistry between customer and supplier in the business or enterprise.

To help your supplier team serve you better, it’s always an excellent development to make consistent demands within a reasonable supply quantity.

Let your suppliers be used to a range of how much quantity of goods you usually order, at what times, and what make or model.

That way, there is already a possible target to meet up to, and demands are easier to supply.

Play your part well as a good customer

The customer also has his role in making things work well between him and the supplier. For instance, you have to regularly encourage the suppliers to deliver well and on time by fulfilling what is expected of you – for example, making payments on time without being asked for so long.

You would have to leave out the idea of “the customer is always right” on this one. Leave that notion to the suppliers to deal with.

Penalize when necessary

There may still be defaulting once in a while from the suppliers, whether intentional or not. Not doing anything about it is bound to encourage nonchalance for future occasions.

So, as part of your agreements, including penalties and incentives for when benchmarks are not met. However, they have to be lenient so you don’t scare off your suppliers.

It’s essential always to acknowledge and have it at the back of the mind that suppliers are people. So, they can’t be managed like machines or tools.

While you go at it setting targets and meeting deadlines, remember that supplier performance can only be managed and not guaranteed, and it all depends on the willingness of both parties to make it work.