Your business performance is directly related to the quality and delivery of materials and services from your supplier. They play a major role in your success or failure.
Recognizing this point requires that we must pursue a new relationship with our suppliers. An appropriate methodology is necessary to accommodate success.
How do you know how well your suppliers are doing? Most responses present a subjective view. It is akin to throwing darts - sometimes you are close, but most times you are "off target".
You need a tool that will provide an objective, quantitative visibility of what the suppliers are doing. This program will assist purchasing and other internal business functions (internal customers) in evaluating performance. It will aid you in working with suppliers to improve quality, availability and costs of products and services.
This article will be the first of three (3):
- The Importance & Why to Employ a Formal Methodology
- What is the Selection Process?
- How to Evaluate the Supplier and use the Information
THE IMPORTANCE:
All businesses desire and strive for improvement. This requires a means of knowing where to apply resources to achieve a better performance. So that means we need to know where we are at any point in time to economically employ the time, money and peoplepower.
An informal data accumulation process employed when you need to determine what areas need improvement is time consuming and costly.
Knowing that at any time the posture of your business performance with your customers is directly influenced by your suppliers. Having immediate access to performances internally and externally is a necessity in today’s customers performance expectations.
Being able to view the performance posture of our suppliers gives us the insight to do something to change the ongoing performance. This will set up building a mutually beneficial relationship, that can lead to performance improvements by the supplier. In addition, it will reduce the follow-up efforts in the Purchasing department permitting more time to be spent on supply improvements.
Tune into the next article which will define “How to select the supplier – the criteria and method to use!”