Sherry suggests that part of the challenge is that companies focus on the tools instead of the business process first. This results in not having a real business process in place before deploying tools that can then lead to an overt focus on metrics instead of end results. This can cause organizations to develop scorecards but not a supplier communication process that allows them to be effective. And worst of all, without process, organizations may identify areas of improvement and KPI deviations, but will fail to follow through and take action.
What should companies look for in SPM capabilities from vendors as a foundation? For one, organizations supplier survey and assessment development and deployment capabilities are key. It's also essential to enable the systematic collection of assessment results, stakeholder satisfaction surveys and 360° evaluations. From a KPI perspective, organizations need to be able to create formulas, import KPIs and performance data from other systems, and roll up KPIs to scorecards and share scores and results with suppliers. In addition, systems should enable organizations to conduct trend analysis while receiving alerts when performance issues arise (based on their own, specifically designed thresholds. Supplier performance and operational management capabilities should also enable procurement, supplier development and supply chain teams to measure suppliers against contract terms and service level agreements while providing a means of tracking corrective actions and improvement plans, including data collection and automation collection capability for site visits and audit support.
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