05 September 2002
Monitoring supplier performance should be ongoing rather than a static project done at intervals, according to the CIPS position paper Performance Monitoring for Suppliers.
It says performance is best based on a supplier's ability to comply with contractual obligations but should also include an opportunity for continual improvement for the supplier to exceed its targets.
Importantly, the targets should be jointly agreed with suppliers at the outset of a contract rather than set up as it progresses.
For successful supplier monitoring, purchasers should ensure they are open to feedback about changes they can make to their own company to maintain the supplier's performance.
To this end, buyers must ensure their suppliers get all the information they need promptly from the purchaser to allow them to meet their targets.
Above all, they should heed early signs of a drop in supplier performance. The problems may be a sign the supplier is having financial problems in meeting its targets.