8. Supplier performance & development
Procurement does not conclude when a Purchase Order is issued; it initiates a continuous relationship that requires active management based on quantified data. Suppliers who consistently struggle with on-time delivery or quality can severely impact the production schedule.
This chapter details the framework for Supplier Performance Management. It covers the implementation of supplier scorecards, tracking essential metrics like On-Time Delivery and Defective Parts Per Million (DPPM), and presents a methodology for developing underperforming vendors into reliable operational partners.
- 8.1 The supplier scorecard
A scorecard functions as a vital feedback loop. Without objective performance data, supplier management can easily become stalled by subjective disagreements. Quantifying a supplier's impact on your operation provides the clarity needed to either dri...
- 8.2 Supplier development & escalation
Escalation is a structured process designed to restore stability to the supply chain when disruptions occur. When a supplier experiences a notable failure—such as a quality escape, a significantly missed delivery, or a commercial issue—the objective...
- 8.3 Supplier business reviews
Supplier Business Reviews are structured forums designed to align a supplier's operational trajectory with your manufacturing requirements. To ensure these meetings are productive and respect engineering time, they should remain focused on performanc...