Are you a business handling multiple supply chains?
The performance of your suppliers plays a pivotal role in determining your success and the satisfaction of your customers. However, supplier performance can be impacted by a wide variety of factors, such as financial, geopolitical and natural climate factors.
So how do you measure the performance of a supplier and what happens if you suspect one of your suppliers is underperforming?
This blog post will give you the supply chain management guidance you need to resolve the issue of underperforming suppliers, including how to detect if they are underperforming with Authenticates tools.
How can supplier performance impact your business?
Supplier performance is pivotal for the smooth running of your business. The better a supplier performs, the better your business performs and the more trust you gain from your consumers.
When a supplier consistently meets high standards, you can have confidence that your shelves will remain well-stocked, the products will consistently exhibit excellent quality, and your customers will consistently receive top-notch service and satisfaction.
When your business relies on suppliers, the effects of poor suppliers in your supply chains can impact various aspects of your business operations.
Poor suppliers can lead to delays, increased costs, damage to your brand’s reputation and dissatisfied customers. When a supplier is lacking in their operations, it can increase the workload for your workforce and can even increase the risk of legal issues.
It is important for your business to ensure you monitor supplier performance and make sure you are taking steps to rectify any issues with poor suppliers immediately.
What are the factors affecting supplier performance?
Supplier performance can be influenced by various factors, including:
- Poor communication
- Quality issues
- Late deliveries
- Financial issues
- Geopolitical factors
- Natural disasters
- Labour issues
- National holidays
These issues can cause suppliers to have increased lead times or to have quality problems.
Criteria for managing supplier performance
It is important to manage supplier performance to determine which suppliers are reaching expectations, and which suppliers aren’t quite hitting the mark. So, it’s crucial to understand what qualifies as good supplier and what qualifies as an underperforming supplier.
While specific expectations may differ from one company to another, the following essential criteria can be used to evaluate whether a supplier is meeting an acceptable standard of performance:
- Timely delivery and order fulfilment
- Consistent product quality
- Effective communication and responsiveness
- Flexibility to adapt to changing needs
- Competitive pricing and cost efficiency
- Ethical and sustainable practices
- Collaborative and proactive problem-solving
- Minimal supply chain disruptions
- Strong financial stability
- Long-term relationship building
Although it can very between different companies, their preferences, and what has been agreed upon with the supplier, there are some key performance indicators to look out for to assess if a supplier is underperforming.
Some common criteria include:
- Frequent delays in product shipments.
- Consistent quality control problems.
- Lack of responsiveness or poor communication.
- Frequent price fluctuations or hidden fees.
- Failure to meet regulatory or ethical standards.
Identifying these issues early is key to mitigating their impact on your supply chain.
If you detect some of the above issues in your supplier(s), it is time to move on to the next steps.
Supplier management solutions
Solving supply and demand problems often requires proactive measures.
Here at Authenticate, we offer supplier risk management tools such as Supply Chain Mapping and KPIs, providing the insights needed to balance supply and demand efficiently.
Below are 8 amazing platforms we offer that can help mitigate risks, improve relationships with suppliers and help you conduct corrective action in improving supplier performance.
1. Supply chain mapping
Supply Chain Mapping allows you to map, monitor, and visualise your supply chains across all tiers. This transparency is invaluable when dealing with underperforming suppliers as it allows you to identify bottlenecks and inefficiencies, allowing for timely intervention.
2. Audits & assessments
With Audits & Assessments, you can create customised digital surveys to monitor supplier compliance. Benchmarking against industry standards becomes a breeze as this tool helps you maintain a high level of supplier performance.
You can run audits and assessments across your suppliers to determine which ones are underperforming, providing you with the information you need to move on to the next steps of supplier performance management.
3. Certifications
The Certifications tool enables you to track live supplier certification status, including adherence to key legal policies.
This ensures your suppliers meet essential legal standards, giving you the power to avoid legal issues in your practices which increases customer trust.
4. Product specifications
Product Specifications allow you to manage and share complex product specifications across the supply chain.
Streamlining these processes reduces the chances of misunderstandings or deviations from agreed-upon standards as suppliers always have the information required.
5. Document management
Centralising critical documentation, declarations, and policies with Document Management ensures quick access to vital information.
This helps in resolving disputes and compliance issues efficiently, and ensures your organisation constantly has evidence of your due diligence.
6. Incident management
Incident Management helps you collaboratively monitor and resolve critical incidents across supply chains. This proactive approach prevents future disruptions caused by underperforming suppliers.
7. KPIs
Key Performance Indicators (KPIs) are essential for managing and scoring supplier performance over time. Essentially, this tool gathers.
8. Analytics & dashboards
Transform static supply chain data into actionable insights with Analytics & Dashboards.
Understanding the root causes of underperformance becomes easier, allowing you to make informed decisions.
How to get started with supplier performance management
Do you want to implement an effective supply chain management system into your business operations?
Authenticate has the tools and support you need to ensure your suppliers are performing at an excellent standard that meets the needs of your business.
Explore our tools and contact us to get started with supplier performance management.
