Supplier Performance Management — the Analyst Perspective

Among the analyst firms who cover Spend Management issues on a regular basis, AMR has clearly taken the lead in tackling supplier performance and supply risk issues. As the "Spend Fool" says, you get what you pay for. And it's no different with industry analyst research and relationships. While other firms are often mired in just technology when it comes to these and related areas, what I find most useful about AMR's analysis is how they really understand and get at the business elements of supplier performance and supply risk. A recent brief on the subject by Mickey North Rizza (registration and membership required) provides a detailed examination of how supplier performance fits into a demand driven supply network approach. In addition, it provides an overview of the scorecarding journey companies take, showing how only a minority of organizations are tracking the right set of metrics that translate to quantifiable customer and business returns.

In my view, supplier performance should be front and center on the radar screen for procurement, operations and customer-facing executives. But far too few organizations pay it the credence it deserves, instead opting to deploy half-baked scorecarding strategies to "check the performance management box". If you’re curious to learn about how better to tie supplier performance metrics to business performance, there’s no better analyst or consulting outfit to consult with on the subject than AMR -- at least as it pertains to the intersection of process and technology. Let's hope that Mickey's and AMR's good work here will inspire other analyst and advisory firms to invest similar research and efforts into an area which should be as important as important as sourcing and procure-to-pay processes, but often falls to the bottom of the investment barrel.

Jason Busch

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