SIG University Certified Supplier Management Professional (CSMP) program graduate Elyse Benoit captures the 4 key benefits from SPM - cost, quality, reliability/risk, and relationship management and how these 4 areas all drive value to the business.
I am a Third-Party Manager. Often when asked what I do for work, my response is juvenile: “…basically I manage suppliers to their contracts and make sure they are doing what they are supposed to be doing.” At this point in my career, I should know better than to downplay the importance of supplier performance management. In today’s competitive business environment, companies need a solid and effective supply chain to succeed. And a vital component of any successful supply chain is effective supplier performance management.
The Chartered Institute of Procurement & Supply defines supplier performance management as “a business practice which extends supplier evaluation and is used to measure, analyze, and manage a supplier’s performance to cut costs, alleviate risks, and drive continuous improvement.” This essay will outline the four key benefits of effective supplier performance management: improved supplier relationships, cost savings, improved quality, and risk mitigation.