Logistics Sourcing: Supplier Performance Management

This post is based on material from the 2013 Spend Matters / Procurian research brief: Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal (free, registration required). Contributors from Procurian include Ed Sands, Global Practice Lead-Logistics and Scott Youngs, Logistics Category Management Group Leader. Spend Matters contributors include Jason Busch, Executive Editor, and Pierre Mitchell, Chief Research Officer.

Fleet changes involving a shift to natural gas are at one end of the strategic decision spectrum. But other decisions, including carrier reviews and selection, must happen every day. Scorecarding and broader supplier performance management represent often hidden levers that most transportation organizations are not able to pull in these everyday activities.

If organizations have a transportation management system (TMS), they may track some KPIs, such as movements, cost structure, cost per mile, etc. But when it comes to compliance data, such as what carriers are preferred for what lane, most companies do not have a lot of information readily available on hand. By using a front-end dashboard that aggregates this information, sourcing teams can centralize scorecarding information to get to details quickly.

In addition, most organizations do not spend enough time on the topic of supplier research and development in the transportation area. Such focus is not to be underestimated. The most successful category leads spend adequate time researching suppliers, developing relationships, and understanding capabilities to map the field to their own needs.

Supplier development activities with existing carriers can include scorecarding efforts that start first with defining performance criteria metrics and KPIs, which include but go beyond price. By defaulting to price-based criteria alone, relationships and opportunity are undermined.

For further analysis of this topic, download the complete Spend Matters and Procurian research brief today: Logistics Category Perspective: Strategies and Trends in Trucking and Intermodal.

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