Here is a common problem: contract managers and supply chain managers (SCM) anecdotally hear about every single service issue from stakeholders, but when it is time for a QBR, the vendor presents their own “data” that indicates the relationship is fruitful and successful. What’s going on here?
Contract managers and SCM are often left scratching their head, wondering how to reconcile what they hear from their end-users and what the vendor presented.
The truth is, the status of the relationship is probably somewhere in the middle.
Anecdotal complaints from stakeholders are often exaggerated and belabored because, at the time of the performance issue, that stakeholder was feeling a very real sense of anger because workflow or schedules were impacted as a result of a service failure.
Vendor data is likely not accurate because, let’s be realistic, they have a pecuniary interest in painting the relationship as successful. After all, that’s how they make their money.
Question: How does a Contract Manager or SCM reconcile the two?
Answer: Develop and track your own Key Performance Indicators (KPI) for vendor performance.
- Developing KPI based on the needs of the stakeholders (i.e. on time delivery, turn around time, number of incorrect deliveries, number of service calls to fix a single issue, etc.) will help reconcile the suppliers data and the stakeholder anecdotes.
- Develop a standardized KPI tracking document and give it to end users to track metrics. Ask them to keep consistent record of KPI failures and send their updates directly to your inbox.
This data can be used during QBR to support your organizations complaints, refute vendor data, and influence performance with your current suppliers. Moreover, you can use this data in future sourcing endeavors to develop strong scopes of work, service level agreements, and performance goals for new vendors.
Tracking this data can also help logistics teams identify any performance/behavior issues of the stakeholders and help improve efficiencies.
If you are interested in learning from our team of vendor management experts on how to create KPIs and benchmark your business partnerships for real ROI, please reach out to email@example.com.