Purchasing Management - Supply Chain

Briefly explain the concept of supplier performance measure
Supplier performance management is a critical address in the procurements system and ensures that suppliers performance meets the expectations delimit in the contractual obligations. The purpose of performance measurement is to take costs, mitigate risk and drive continuous improvement in value and operations.

1.The following is measured to determine performance:
1.1 three-figure Variables:
Cost reduction suppliers ar measured i.t.o target price, separate suppliers and pricing history compared with inflation increases.
Quality performance evaluated against specifation, preceding(prenominal) supply history and compared to suppliers of same products
Delivery performance evaluated against bill and delivery due dates.
1.2Qualitative Variables:
Responsiveness, Problem solving abilities, novel product development support
Technical ability, Commitment to R&D, & customer/supplier relationship

2.Measurement and Reporting Frequency
Regularity of performance report moldiness be done daily, weekly, monthly and annually to transit supplier performance. This will enable early detection of problems and deed over for corrective action for poor performance.



Poor performance must be addressed as soon as contingent to minimise disruptions in day-to-day operations. Historic reporting enables a buyer to build up a track degrade on a specific supplier to enable easier and rapid decision making when required.

3.Uses of Measurement Data
Stored selective information can garter identify non-performing suppliers. This enables identification of highly capable suppliers with which long-term partnerships are formed or preferred status is given.
Importantly this data can ensure that purchase volumes are allocated according to then(prenominal) performance ratings. A major benefit can bring home the bacon buyers to identify areas requiring improvement.

4.Types of Supplier Measurement Techniques:
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