Supply Management

The Importance of Effective Supplier Performance Management

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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.

Elyse Benoit, Third-Party Management Senior Advisor, Cigna

Assessing Business Models

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SIG University Certified Sourcing Professional (CSP) program graduate Andy Perkins highlights the key foundation for driving excellence between supplier and client in the new market we live in.

Procurement is an integral part of the process of acquiring goods and services from external parties that help drive the goals of an organization. This essential function is a part of every business, and a company must develop sound business models that ensure the process is efficient and effective.

Assessing business models is a crucial step in determining the strengths and weaknesses of the overall Procurement strategy. Several factors determine whether a business model is efficient and effective. This essay will explore aspects such as supplier collaboration, transparency, risk, technological adoption, and sustainability.

The first step to assess the business model for Procurement is to explore the core components. Typically, this involves identifying the needs of the organization or team, selecting the suppliers, negotiating the contracts, and managing the relationships. An efficient and effective business model should address each component and provide a clear path forward.

One key factor to explore when assessing a business model for Procurement is the level of collaboration between suppliers and the organization. Collaboration is a critical aspect of supplier relations. Additionally, this can be a tremendous value-add considering that resources can be leveraged and used when identifying a proposed solution. As an organization, we see this as the most significant benefit to supplier collaboration, as this allows for a solution-agnostic approach and ensures organizational alignment throughout the process. This collaboration can be done through regular meetings or project-specific initiatives.

Andy Perkins, Senior Category Specialist, Maxar Technologies

Achieving Supplier Relationship Compatibility

SIG University Certified Supplier Management Professional (CSMP) program graduate Samantha Peters explains the objectives, strategies, and collaboration necessary to achieve supplier relationship compatibility.

Samantha Peters, IT Global Procurement, Cigna

It's All About The Fit

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SIG University Certified Supplier Management Professional (CSMP) program graduate Nick Fratto defines why finding the right supplier fit for your organization is so crucial for success.

Nick Fratto, Sales Enablement Specialist, Sourcing Industry Group

Forming Affective Partnerships

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SIG University Certified Supplier Management Professional (CSMP) program graduate Brett Hillsberg shares an example of values exchange and balancing with suppliers from his past experience.

Brett Hillsberg, Sourcing lead & Category Manager, ASML

Understanding Supplier Management

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SIG University Certified Supplier Management Professional (CSMP) program graduate Kaila Flynn shares how to maintain supplier management from a sales perspective and provides a great reminder of how important relationships and the aspects that make relationships successful are in business

Kaila Flynn, Sales Executive, Sourcing Industry Group

KPI & Performance Management

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SIG University Certified Sourcing Professional (CSP) program graduate Thomas Moran shares the different types of KPIs that are vital to an organization and the importance of performance management.

A KPI is a Key performance indicator; this is a measurable rate or value that demonstrates how effectively and efficiently a team or objectives is performing. Many companies use KPIs to evaluate success in reaching goals or targets. They should have a clear objective and align with your business goals. 

Why are they important? 

KPIs are necessary to determine if a business is meeting its goals, give accountability, and leverage the health of outsourced relationships based on performance metrics. If we look at BPO ( Business process outsourcing ), KPIs are critical to determining the work's weekly, monthly, and quarterly health of the outsourced work. It creates accountability to ensure. Vendors are meeting and maintaining these values and ensuring the work they are supplying is consistently kept to a high standard. 

Setting and Measuring KPI 

KPI should be directly related to your business goals. These should be quantifiable measurements to gauge the health of your work. For instance, in some BPO work, your KPI could be based on customer satisfaction rates, turnaround time, quality of action taken, or how effectively and efficiently the team is performing productively.

Type of KPI -

Thomas Moran, Global Outsourcing Senior Programmer Manager, Pinterest

What is Important For Me In a Supplier Relationship

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SIG University Certified Supplier Management Professional (CSMP) program graduate Andy Peksa shares what he finds as the most important aspects of a supplier relationship and how they may be able to help you in your role.

Andy Peksa, Senior Buyer-Procurement Ops, T. Rowe Price

The Benefits of Intelligent Process Automation

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SIG University Certified Intelligent Automation Professional (CIAP) program graduate Bob Lutz shares how implementing intelligent process automatation can be beneficial to your business

Bob Lutz, Account Executive, Medius

Improving Supplier Relations

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SIG University Certified Sourcing Professional (CSP) program graduate Sergio Mielnik shares an in-depth understanding of how supplier relationships should be managed and how improving supplier relations at different levels will create successful sourcing engagements.

Throughout the certification, a constant emphasis on supplier relationships and the guidance provided to use these relationships as drivers to successful sourcing engagements. Suppliers are critical drivers of your pricing, delivery, strategy, and forecast. I have engaged suppliers from sole-source, directed, competitive, non-competitive, and management sources. Each situation has been unique, but I have treated all suppliers with the same level of communication and collaboration.

As supply chains get tighter and more competitive, it is essential to keep those communication channels to create a personal approach rather than a solely monetary exchange approach. This does not mean you hand out the keys to your supplier, but if this could happen, you can trust the relationship developed to obtain solutions and drive success.

Managing suppliers at different levels, whether critical or non-critical, is another topic that I found interesting. The relationship between a “ma and pa” shop versus a top-tier conglomerate is not the same. Still, you must strive to find that personal connection with different types of companies, provide fairness in your approach, and understand each supplier’s competitive advantages. I have often found myself waiting in line with top suppliers, which affects our delivery and production schedules.

Sergio Mielnik, Lead Business Risk and Controls Advisor, USAA