New Compass Research: Beyond Basic Scorecarding — Supplier Performance (SPM)/Developement

We’re excited to announce our latest free research Compass Research brief, Beyond Basic Scorecarding — Supplier Performance and Development Approaches to Drive Competitive Cost and Risk Advantages. The paper is part of Spend Matters Compass Series IV: Next Level Supplier Management — Technology, Practices and Approaches for Cost Reduction, Risk Improvement and Supplier Development. If you’re curious, you can also check out other recent papers in the series Leveraging Supplier Management Platforms for Multiple Goals: Risk Reduction, Supplier Diversity and CSR and Supply Risk Management — Segmenting the Technology and Content Landscape and Choosing the Right Category of Solutions. In our latest supplier management research, we’ve opted to go deep on scorecarding and supplier performance management, topics that do not get enough attention on these pages, let alone anywhere else. Featuring insights from Spend Matters contributors Jason Busch and Sherry Gordon, the free research download is essential reading for those getting started with or accelerating supplier performance management programs.

For those interested in learning more, the paper covers the following areas:

  • Top reasons why supplier scorecarding programs come up short
  • Overcoming the scorecarding hurdle — getting program design right from the start
  • What to measure and how to measure it
  • Optimal survey design
  • Defining baseline metrics and scoring templates
  • Importance of quantitative information and types
  • Identifying “soft” data inputs and quantifying the qualitative
  • How to get the most from qualitative metrics
  • How to look at supplier trending
  • Typing SPM initiatives to green and CSR programs
  • Real-world case examples (private and public sectors)

Among other recommendations the paper makes at its conclusion, Spend Matters suggests:

  • Putting technology at the core of initiatives and, ideally, integrating scorecarding and performance information into other solution areas (e.g., sourcing, spend analysis, etc.)
  • Investing in programs that focus on overall supplier process improvement, higher levels of efficiency and general innovation rather than just quality and performance monitoring
  • Prioritizing and creating a rank-order approach to factor in the most important KPIs and relevant information for each reporting period
  • Setting goals in broader sourcing and supplier management groups for cost take out using scorecarding and performance management as an overall component of core procurement and supply chain cost reduction (e.g., 10% of overall savings targets should come from supplier development initiatives)
  • Making sure the scorecard has “teeth” — ensuring that all parties (especially suppliers) know that the scorecard itself will help determine the extent of the overall future trading relationship between the companies
  • Considering the incorporation of a specified set of third-party information into a performance evaluation to drive effective, fair and consistent measurement (e.g., risk data, CSR certifications, etc.)

If these topics are of interest, we encourage you to download
Beyond Basic Scorecarding — Supplier Performance and Development Approaches to Drive Competitive Cost and Risk Advantages as well as our other related research on supplier management, risk management, etc. We also encourage you to check out the supplier risk management track, (which will include performance management components in some of the presentations) at ISM Orlando this year.

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Obsessed with how companies manage, spend and save money, Jason writes about procurement, trade and supply chain issues @ Spend Matters. He has significant first hand experience developing and marketing technology and services products, has advised numerous companies on sourcing and related techniques as well as M&A pursuits.  In previous lives before tech, he was a management consultant and merchant banking analyst.

2 responses to “New Compass Research: Beyond Basic Scorecarding — Supplier Performance (SPM)/Developement”

  1. Aimstar

    Thanks for the info. The data is very good. To begin a serious study.

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