Supplier Performance Management

CSCP treats supplier performance as an ongoing management process. Measurement is important, but it must be followed by communication, corrective action and improvement.

Why it matters

Supplier quality, delivery, responsiveness and reliability directly affect the buying organization’s cost, service and risk.

Core concepts

• Supplier performance should be tracked across the supplier base, with additional attention on critical suppliers.

• The organization and supplier should collaborate on performance measures, reporting and improvement.

• Performance processes should be standardized so supplier results are evaluated consistently.

• Measures can address responsiveness, schedule performance, quality assurance, financial stability and technology capability.

• Performance gaps should trigger an error-correction or corrective-action process.

• The sophistication of performance management should reflect the organization’s dependence on the supplier and the complexity of the relationship.

• Supplier performance should support continual improvement rather than only supplier policing.

Remember for the exam

• Supplier performance management is ongoing, not an annual scorecard exercise.

• Critical suppliers deserve greater performance-management attention.

• Corrective action should follow identified performance gaps.

• Measurement should support improvement and relationship decisions.

Apply it

• Use this concept in a practical decision by asking: Supplier Performance Management

• Then check the decision against this principle: CSCP treats supplier performance as an ongoing management process. Measurement is important, but it must be followed by communication, corrective action and improvement.

Exam trap

Watch for questions that test this distinction or principle: CSCP treats supplier performance as an ongoing management process. Measurement is important, but it must be followed by communication, corrective action and improvement.

Key takeaway

Supplier performance management establishes expectations, measures results, identifies gaps and works with suppliers to correct and improve performance over time.