A supply chain, while being an essential aspect of the functioning of the business, can be quite tricky to manage. This is because it is an external factor, and the business does not have full control over all its aspects. The detriment an inefficient or broken supply chain poses to a company is too debilitating for the company to risk. The best strategy is for the business to develop a supplier performance management strategy. This eases the performance of supply duties and ensures that the business performs its functions without delay or stoppage.
The process of managing the performance of suppliers is not relegated to once the relationship is already established. For best results to be achieved in managing the supplier’s performance, the process must be undertaken from the initial stages of the vendor sourcing process. This means the company must undertake a comprehensive vendor screening process. They must vet the vendors on their ability to meet the desired service delivery levels.
The company starts the vending process by seeking submission of proposals and service level agreements. This provides them with a theoretical understanding of what to expect from the suppliers if they should contract them. They can then eliminate the ones who don’t measure up to their desired standards. However, when they are doing the elimination, they should still keep the contacts and other relevant information on file. This information can later be handy and useful. They can then call in the vendors for an interview; this should be accompanied by a visit to their facilities. This is important if the business is to establish what information contained in the briefs submitted was fact and what was advertising puffery. They can then give the business that they found best qualified a trial run. The best way of doing this is by giving them actual orders. Telling them it is a test leads to skewed results as they will make an effort to impress.
The information derived from the trial run can be used to create a core group of suppliers who can be readily relied upon. These will form the backbone of the supply chain. This enables the business to create a supply network that is resilient, which enables it to function without interruption or delay. Businesses must make a point of investing in supplier performance management if they are to gain any useful control over external factors of performance, thus enabling the business to function optimally at all times.
