This is a groundbreaking interview with Sherry Gordon, a recognized expert on supplier performance management and author of Supplier Evaluation and Performance Excellence:  A Guide to Meaningful Metrics and Successful Results.

This interview contains 67 minutes of valuable information that  you need right now to manage your suppliers.  In this interview, you’ll learn:

• Why you should measure supplier performance
• How to figure out what to measure and how to develop Key Performance Indicators (KPIs)
• Examples of commonly measured areas (e.g. cost, quality, time, technology)
• Why you need to use leading indicators, not just lagging indicators….with examples
• Why supplier risk has become so critical and ways to address it
• How to segment your supply base to help you decide which suppliers to measure
• Common sources and types of supplier information (e.g. scorecards, audits), along with the pros and cons

The podcast with Sherry Gordon is in the Current Quality Library….you can gain access here.

Just yesterday I went grocery shopping and on my list was a particular brand of energy bar that hasn’t been available since the peanut butter recall.  Even though I’d been buying the same brand for several years and considered myself a loyal customer, I found myself buying a sampling of other brands to try out ….which really made me question how loyal I really was….odds are if I’m able to find an adequate substitute , I’ll probably stop looking for my ‘original’ favorite because I’ll have a ‘new’ favorite.  It makes you wonder how many other customers feel the same way, creating a loss of revenue for the manufacturer that may take years for them to recoup…or even worse, they may never rebound and go out of business.

Let’s learn from the peanut butter recall and take a look at ways to better manage our suppliers….  

1. Identify Secondary Suppliers - Always make sure that you’ve identified and qualified secondary suppliers….especially for raw materials or services critical to your business.  This way if something happens to the primary supplier, your business will be uninterrupted.
2. Audit Your Suppliers – Periodically you should audit your suppliers to make sure they’re compliant and are in control of their processes.  If you’re constantly dealing with issues regarding a particular critical supplier (e.g. you reject their raw materials, order delivery is late), then you should do a physical audit and not just a questionnaire audit.  It could be a warning sign of a much larger issue….think of the peanut butter recall.  
3. Follow-up On Outstanding Corrective Actions – Stay on top of your supplier corrective actions to make sure the issues are addressed on-time. Otherwise, your supplier will quickly realize that corrective actions for your company aren’t a priority and they’ll spend time on other companies that demand action. 
4. Analyze Your Supplier’s Certificate of Analysis – Analyze the data on the certificate of Analysis for all in-coming raw materials….I’ve seen suppliers send material that was outside of their own (the supplier’s) specifications.
5. Communicate Status- If you experience a recall or any issue for that matter, it’s very important that you continually update your customers on the status….even if you don’t have any new information….otherwise you take the risk of losing your customers forever.

Ask yourself this question….How loyal would your customers be if you had to recall a product and you couldn’t tell them how long before you could begin production?….I think we know the answer. 

Take care,
Sandra