Please click here for the for the first post in this series. This post is based on a case study in the Spend Matters Perspective: Services Procurement Benchmarking -- Truth in Numbers to Achieve a New Level of Program Results.
When CareFirst evaluates contingent suppliers based on services procurement KPIs, it bases its approach on considering aggregate performance -- based on both the individual supplier level (aggregate KPIs) and relative performance overall. It rolls up a combination of KLPs/metrics (see below) to provide a forced ranking to suppliers in each category. But actual rank can be less important than trending a vendor's ability to react to feedback when it comes to overall supplier performance management efforts in contingent spending.
Most important of all, providing feedback to suppliers allows CareFirst to "direct the discussion" and get more from their existing pool of vendors in addition to achieving the best returns for stakeholders in a consistent, measurable manner. These are lessons we should all consider when developing supplier performance management programs beyond just contingent programs. They are relevant across services spending, direct and indirect supplier development activities.
When it comes to actual KPIs, CareFirst considers a range of metrics by which it measure suppliers. A selection of these includes:
- Total positions filled
- Days to fill
- New RFQs
- Active open RFQs
- New starts
- Sole source starts
- Over the rate card starts
- Submitted over rate card (e.g., 0-5, 5-8, 8-10, over 10)
- Placed over rate card
- Submit to hire ratio
- Interview to hire ratio (e.g., 0-3, 3-5, 5-8, over 8)
- Offer acceptance
- Response time (e.g., 0-24 hours, 24-48 hours, 48-72 hours, over 72 hours)
- Response rate (e.g., 90-100%, 80-89%, 70- 79%, below 70%)
- Average rate: Over the rate card
- Over the rate card
- Total over rate card %
- Rate card compliance
For a full list of KPIs, you can download the complete case study in the Spend Matters Perspective: Services Procurement Benchmarking -- Truth in Numbers to Achieve a New Level of Program Results.