6 Tips to get the most out of your suppliers!

Written by Managing Consultant Tyrone Griffiths, at Airwalk Reply.

Every organisation needs a system in place for evaluating and measuring the performance of the suppliers they work with. Here are six tips (with a loose football theme) to help effectively rate suppliers and monitor their performance:

1. Evaluate suppliers from the Kick-Off

Create specific performance criteria for monitoring and evaluating suppliers from the kick-off and make sure you do this on a regular basis. Your system should reflect your suppliers’ size, quality management systems, complaint history, and financial stability.

2. Create classifications for all suppliers on the field

If you have a large number of suppliers on the playing field, separate them into groups based on how critical they are. You can then evaluate them according to the effect they have on your product/service in order of importance or by size of monetary value in terms of live contracts or by another classification.

3. Rate supplier performance – what does the match programme say?

There are lots of techniques for rating a supplier's performance: evaluation forms, surveys, system metrics, and software. However, by developing a customised method, you can ask your own teams to rate your suppliers. You can review how many issues you have had with a supplier, how many product defects you have had with a supplier, or how many customer complaints you received due to bad service.

4. Review how well suppliers are doing – What do the supporters think?

You need to decide who will be responsible for reviewing the ongoing supplier relationships. When evaluating level one suppliers you may require input from other senior managers across the business, whereas with level two and three suppliers it may only be the procurement/project teams that monitor performance.

5. Maintain good relationships within your team

Treat suppliers as part of your team. Communicate often and openly. Avoid conflicts by paying on time or at least honestly addressing late payment issues. Be transparent with suppliers and make sure they understand your needs, expectations and what ‘good’ looks like. Don’t allow the supplier to dictate the relationship, remember that you are the customer and are in charge!

6. Decide very carefully when to show the ‘red card’

Everybody knows the football term ‘the red card’, I do, but as a coach for an under 11’s football team nobody gets the dreaded ‘red card’ as this only comes into play when the kids are older! In the real world you need to be very careful about when you issue the ‘red card’ to a supplier. Before it gets to this position I would recommend:

  • Showing appreciation for a job well done.
  • Giving a supplier repeat-business for a job well done.
  • If you have to give a warning allow the supplier, the time to correct the problem.
  • Never bring in your ‘big guns’ too early i.e. save your escalation to your Seniors to the right point, as this adds more value.