Supplier Performance Metrics Definition

Supplier performance metrics are the key indicators used to measure and manage supplier performance. There are many different types of supplier performance metrics, but some of the most common include on-time delivery, quality, cost, and responsiveness.

When defining supplier performance metrics, it is important to consider what is most important to your organization and what you want to use the metrics for. For example, if you are primarily concerned with cost, then you might want to focus on metrics like price per unit or total cost of ownership. If quality is your main concern, then you might want to focus on metrics like customer satisfaction or defect rates. And if you’re looking to improve supplier responsiveness, then you might want to focus on lead time or turnaround time.

Once you’ve decided which supplier performance metrics are most important to your organization, you need to set targets for each metric. These targets should be realistic and achievable, but should also challenge your suppliers to continually improve their performance. Once you’ve set targets, you need to track and report on progress against those targets on a regular basis. This will allow you see how your suppliers are performing and identify any areas where they need improvement.