Measurement of a supplier’s performance involves defining key performance standards, each with a metric of performance, and monitoring performance against the standards. Supplier relationship management involves creating a framework not only to measure performance, but also promote performance improvement. For the supply of tangible products i.e. goods, it is relatively easy to measure supply chain performance such as lead-time. It is harder to measure the quality of service delivery, and if measurement is broadened to include corporate social responsibility issues, such as ethical behaviour, then measurement of supplier performance becomes a significant challenge. See also Benefits Realisation Plan, KPI, Performance Review and Supplier Relationship Management.

Supplier Performance Management training is available at Academy of Procurement.

« Back to Glossary Index