Supplier Performance

Boost one of the major issues of operational performance: supplier performance

In many sectors, underperforming suppliers and subcontractors are one of the main factors in poor operational performance in terms of customer service, management of working capital requirements, and non-quality costs.

When measured, poor supplier performance is generally the result of:

  • Unbalanced prior negotiations (cost of procurement versus expected service)
  • Insufficient degree of contracting (definition of tracked performance indicators, bonus-malus system, etc.)
  • Unsuitable tracking of performance (inadequate measures, lax tracking)
  • Insufficient level of collaboration and/or poor-quality supply processes within the company
  • Ignorance of real supplier constraints
  • Lack of Supply Chain maturity of suppliers

We support our clients in:

  • Diagnosing the root causes of their suppliers' underperformance and quantifying its direct or indirect impact (on service, costs, cash, etc.)
  • (Re-)Defining the supplier performance management system: dashboard and performance coordination methods
  • Elaborating and supporting the implementation of action plans, which are prioritized and differentiated according to each supplier segment (progress challenges, accessibility, and possible negotiation levers)
  • Targeted amendment of contracting (Key Performance Indicators (KPIs), delivery acceptance T&Cs, bonus-malus, stock porterage)
  • Adjustment of the supply process, development of suppliers’ skills, and upgrading of the related Information Technology
  • Increased collaboration with suppliers
  • Improving reciprocal visibility: exchanging forecasts and plans, supplier Sales and Operations Planning (S&OP)
  • Adjusting methods of stating needs: regular provisional schedules, flexibility agreements, flows pulled by consumers, etc.
  • Increased Supply Chain maturity of important suppliers (including a "supplier improvement" initiative), where appropriate

Case Studies

Operational due diligence in the acquisition of a specialized retailer by an investment fund
Yes, it is still possible to save 30% on indirect procurement!
Finding procurement synergies in a decentralized group
Various levers can still be activated to optimize costs and control the margin
Organizing procurement and managing new products introduction