Your supplier performance surveys aren’t working: 4 easy steps to improve your supplier performance management

So, your manager wants you to put together a “Supplier Performance Management (SPM) program.” Hooray, another spreadsheet that you’ll ask people to fill in that they won’t. Hooray, suppliers will likely raise their prices unexpectedly anyway, and still deliver late. Hooray!

At SupplyHive, we believe SPM should help you work smarter, not harder. Putting together an SPM program doesn’t have to consume all of your time. Here are some concrete steps you can take to move toward an effective and sustainable SPM program.

Step One: Banish the Spreadsheet! Seriously. PLEASE.

Too many companies will show you their SPM process by pulling out a spreadsheet — or a Survey Chimp (we can’t use the real name), or a document with a bunch of fancily designed tables. They don’t work for SPM. Spreadsheets are tedious to fill in, unifying and standardizing all the data becomes a project in and of itself, and the analytics you can conduct within the spreadsheets won’t be as sophisticated as you need to make data-driven decisions around suppliers. Start considering SPM software that can just as easily stand alone or bolt on to your S2P or ERP systems

Step Two: Questions based on science

Surveys should be treated like a science where controls are in place and formulas are followed. What people typically get wrong is: too many questions (that no one has the attention span to get through), too many leading questions, overuse of 1-5 rating scales, questions in the wrong order, double-barreled questions, redundancy of questions, infrequency of administering the questions (responses may have been different yesterday) and not enough open-ended, context-gathering questions. You need experts (and ideally machine-learning algorithms like those of SupplyHive) that fine-tune your survey so that your questions account for the psychology of your respondents. The result is maximized insights and a deep understanding of suppliers’ ongoing performance.

Step Three: Measure what matters

To get a full picture of supplier performance, you need to capture both qualitative and quantitative information. Some suppliers will deliver exactly what the contract asks for, meet all KPIs and metrics (e.g. delivery times, best deals) and seem to check all the boxes — but your people hate working with them. Other suppliers miss deadlines or don’t meet SLAs, but they are driving one innovative project after another that your team loves and that will give you an advantage in the market. You want to capture the holistic value of your suppliers in a measurable way so you can properly benchmark them, know who to prioritize, and know what changes need to be made. This step might seem like a mathematical headache, and it is, which is why you need SPM technology to guide you through it. In the meantime, just make sure you’re doing what you can to consider and gather as much contextual data as possible.

Step Four: Voice of the supplier

Want to get the best work from your suppliers? Want to be the company the supplier comes to when they launch the next great thing and want early adopters to try it? Then you have to let them rate you. And your team. And your processes. Let them give you feedback that will align interests, and make it easy for them to do so! You won’t be able to drive supplier adoption without providing a user-friendly experience.

And for every step of the way …

Don’t let perfection stand in the way of greatness. Start fast, but start small. Pick one supplier. One category. One department. One division. If you have a team that is particularly open to new technology, have them pilot an SPM solution — they will set the pace and the others will follow. At SupplyHive, we of course recommend you look at … SupplyHive; with us, you will be able to succinctly present a supplier performance program at your next team meeting and with minimal legwork. See how SupplyHive can revolutionize your SPM program within a short period of time.