You can’t manage what you don’t measure!
Supplier Performance Management (SPM) is the formal process of managing supplier relationships, measuring performance and driving continuous improvement with a company’s strategic suppliers.
Managing and improving the performance of key suppliers is critical to ensuring a well functioning supply chain and in enhancing competitive position. As companies focus increasingly on their core competencies and outsource a greater percentage of work, their success becomes ever more dependant on the performance of strategic suppliers. The objective of SPM is to improve the performance of all parties involved in the contract and Service Level Agreement. SPM is part of the broader area of Supplier Relationship Management (SRM) as it enables buyers and suppliers to improve joint performance towards shared business objectives. SPM enables your company to provide a process to manage suppliers and ensure that the benefits and requirements identified at sourcing and acquisition stages are delivered throughout the life of the contract, while enabling you to focus resources on value added activities instead of reacting to supplier performance induced problems.
The Benefits of SPM
SPM provides organizations with a quantifiable bottom-line impact. It also provides companies with constant performance information and enables them to establish productive and sustainable relationships with strategic suppliers.
Increase Performance Visibility
You can’t manage what you don’t measure. By implementing an effective SPM program an organization gains a holistic understanding of how their key suppliers are performing. Suppliers can be measured against preset targets and benchmarks established in contracts and Service Level Agreements.
Increase Competitive Advantage
By measuring supplier performance you can ensure the highest possible standard is produced by the vendor. Suppliers will be able to develop a collaborative relationship, developing efficiencies and thus driving their competitive position forward.
Improve Stakeholder Satisfaction
Ultimately the outputs for successful supplier performance management are greater profitability, streamlined productivity and stronger social responsibility – these areas are extremely important to stakeholders.
Biznet’s Supplier Performance Management tool PerforMIS SPM was developed to measure, analyze, and manage an organization’s performance in an effort to improve the relationships with suppliers, cut costs, alleviate risk and drive continuous improvement.
PerforMIS SPM provides a superior management tool for assessing the operability of any business while creating a challenging and dynamic motivational environment for attaining improved supplier performance throughout. PerforMIS SPM facilitates the creation and easy capture of scorecard data and surveys, populates customizable calculations as key performance indicators (KPIs), and displays the results on a graphically rich information dashboard providing a strategic overview to the user. Automated alerts and corrective action items can be generated for immediate, weekly or quarterly review enabling companies to drive compliance and manage their suppliers more effectively.
PerforMIS SPM provides users with numerical parameters in KPI creation to allow for a quick visual snapshot on problem areas when reports are generated. A company’s procurement team and suppliers can use the system to run their own comparisons on how they or their suppliers are performing across different locations or areas of business.
Overall, PerforMIS SPM provides a superior management tool for assessing supplier performance while creating a challenging and dynamic motivational environment for attaining improved supplier performance across any organization.
The Performance Management Loop
Key features and functionality of PerforMIS
There are a range of features and functionality that PerforMIS offers, including scorecards, KPI builders, surveys, measurement and analysis, trending and alerts that help to improve productivity, innovation, lead time and quality.
Reporting
Reporting gives you the ability to view near ‘real-time’ scorecard data, via KPIs, for a specific supplier(s), location(s), and time period, rolled up and grouped by supplier, allowing users to compare supplier A vs. B vs. C for the same service. Each KPI can also be viewed graphically, allowing A vs. B vs. C to be displayed together on the same graph. KPIs can display color-coded ranges of red, amber, and green which allow you to immediately view performance. System security ensures supplier users can only see data for their company.
Geographical Performance Mapping
View supplier performance across their areas of operation. Suppliers operate in multiple locations across the globe and this module allows you to view this performance from a geographical perspective. Each location operated in will have an associated color score (red, amber, green) based on supplier performance for that service in that location. Hover over a score and you will see the breakdown, by section, of their performance which together drives the overall color score for that location.
Performance Slide Filters
This is another graphical representation of supplier performance. Sliders will filter out suppliers who fall below certain scores. Sliders are grouped by section (e.g. HSSE, Cost, Efficiency, Innovation), and you can modify the sliders position to filter out those suppliers who fall below specific scores. This leaves you with a sub-set of suppliers performing at or above the ranges set.
Supplier Heat Maps
Represented as a dashboard report heat maps allows the administrator to define specific time periods for comparison. The report provides a color-coded representation of the variance between the pre-set time periods for a variety of scores (HSE, Efficiency, Cost, Innovation). You can drilldown through the report based on the company hierarchy i.e. Sector/Sub-sector, SPU/BU/PU, geographical location and view the variance in scores for a particular supplier/supplier group for a specific timeframe.
Download Biznet’s SPM Generic Brochure
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