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Why Leveraging Supplier Performance Management Data is Critical for Maximizing Value

Supplier Management

Why Leveraging Supplier Performance Management Data is Critical for Maximizing Value

Supplier Performance Management (SPM) requires a lot of data and a great deal of analysis. Fortunately, there are tools in the market to help you run a formal SPM program so you don’t have to resort to managing spreadsheets and manual supplier-related data analysis.

That’s good news because industry experts agree that supplier performance management is critically important— and that the right technology is essential:

  • Ardent Partners conducted a survey on the state of strategic sourcing in 2015. They found only 28 percent of survey respondents were using a supplier performance management solution. Meanwhile, 48 percent were planning to use SPM solutions in the next 12-18 months.
  • In an Aberdeen SPM benchmarking report, the researchers determined enterprises supporting supplier performance management initiatives with automation tools achieved a 57 percent greater improvement in supplier performance than those without automation. These same enterprises achieved between 6-12 percent savings through technology or process improvement initiatives related to their supplier management programs.

Understanding who your suppliers are, the quality of your suppliers, and having a single, reliable, and comprehensive data source will allow you to better manage your supplier base and drive continued value for your organization.

Utilizing supplier performance management software helps you achieve that value by:

  • Strengthening collaboration with suppliers in areas such as contract negotiation and pricing
  • Segmenting and targeting appropriate vendors for optimum impact on business goals
  • Managing and tracking the corrective action process when supply issues are identified
  • Identifying savings opportunities when contracted performance thresholds are not met
  • Gaining process efficiencies by standardizing and automating the scorecard process and internal workflow
  • Increasing visibility into vendor performance across the entire organization
  • Measuring, tracking and reporting performance KPIs against strategy-focused metrics

The right SPM tool will do all of this through an automated and standardized process that allows users to collect consistent, reliable data and to capture it all in one system for meaningful reporting. So if SPM is part of your supplier management program, make sure technology is in place to support it so you can optimize your efforts.

Supplier Performance Management software provides the tools to collect, measure, analyze and report on supplier-related KPIs in one centralized and standardized system. Supplier Management incorporates SPM functionality to deliver a complete supplier lifecycle management solution. 

 

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