This guide demystifies best practices for modern SPM, providing ready-to-use templates, clear RACI assignments, structured meeting agendas, and a 90-day rollout plan to help you boost supplier performance and deliver measurable results at scale.
Procurement, Quality, and Supply Chain leaders who want a practical, repeatable supplier performance management process that scales across categories and regions.
Define outcomes & thresholds
Align with stakeholders on targets and guardrails (e.g., OTIF ≥ 98%, PPM ≤ 250, expedite cost ≤ 0.5% of spend, audit score ≥ 90). Document category‑specific exceptions.
Select the KPI set
Start with 5–8 cross‑functional metrics (see KPI article) and 2–3 category‑specific. Avoid vanity metrics; tie each KPI to an owner and a decision it informs.
Instrument the data
Map sources (ERP/MES/WMS/QA/CLM), define calculation logic, and set data refresh frequency. Create a data dictionary and lineage notes.
Publish scorecards
Supplier‑facing dashboards with monthly and trailing‑12‑month trends, flags vs. target, and commentary fields. Keep the layout consistent across suppliers.
Run the review cadence
Monthly Ops Review (60 min): delivery, quality, incidents, CAPA status.
Quarterly Business Review (90–120 min): cost/should‑cost, innovation, risk, roadmap, share‑of‑business decisions.
Improve or exit
Convert findings into actions (owner, due date, evidence). If underperformance persists, reduce share or initiate exit following contract terms.
Read more about supplier performance management here.
R (Responsible): Category Manager (scorecards, cadence), SQE/Quality (NCRs & CAPAs), Logistics (OTIF), Finance (cost variance)
A (Accountable): Procurement Lead / CPO delegate
C (Consulted): Operations Lead, Compliance/ESG, Engineering/Design
I (Informed): Legal, Regional Managers, Supplier Sales Lead
Monthly Ops Review
KPI snapshot vs. targets (10’)
Late deliveries / defects deep‑dive (20’)
CAPA status & blockers (15’)
Next‑month risks & mitigations (10’)
Actions & owners (5’)
Quarterly Business Review
YTD performance & trendlines (20’)
Cost & should‑cost variance / indexation (15’)
Improvement initiatives & ROI (20’)
Innovation pipeline / co‑development (15’)
Risk & continuity (10’)
Share‑of‑business update & next steps (10’)
Scorecard fields: Supplier ID, Category, Region, Spend, OTIF, Lead‑Time Adherence, PPM/Defect Rate, NCRs, CAPA aging, Cost variance vs. should‑cost, Audit score, ESG flag, Innovation items, Notes.
CAPA register: ID • Finding • Root cause • Action • Owner • Due date • Status • Evidence link • Verification date.
QBR deck outline: Executive summary • KPI trends • Cost/should‑cost • Initiatives & savings • Quality & audit • Risk map • Innovation • Decisions & actions.
Days 0–15: pick 2 categories, select the KPI set, finalize targets and templates.
Days 16–45: connect data sources, backfill 6–12 months, publish draft scorecards.
Days 46–60: run first Ops Reviews; open CAPAs; refine calculations.
Days 61–90: run QBRs, measure early wins (OTIF, defects, expedite cost), and agree scale‑up plan.
Follow this link if you want to take your processes to the next level and adopt a supplier performance management software or book a demo with Kodiak Hub via the link below.