Scale Vendor Performance Metrics with MetaCX

Vendor Performance Metrics

Vendor performance describes the process by which businesses monitor the quality and impact of their vendors. To do this, they use specific vendor performance metrics, also known as supplier performance metrics.

When asking the question what is vendor performance, the important thing to keep in mind is that it has to do with the value that the vendor relationship provides. Depending on your industry, your vendor and its role with your company will vary, but generally speaking, vendors exist to supply businesses with tools, services, or other resources that they can’t access internally.

Supplier quality performance metrics come in many different forms. They may be based, for example, on product quantity delivered within a certain time frame. Other metrics might track the achievement of specific outcomes.

Supplier evaluation and performance monitoring are critical to the success of your business. Why? Because you want to ensure that you’re getting the most out of your vendor partnerships. It can be a waste of time and money to utilize the services of a supplier that is not performing according to your outlined business plan.

With the number of vendors used by businesses growing at a rapid rate, supplier performance metrics have become increasingly important. They are incredibly useful in helping your business determine the value it's receiving from its network of vendors, and where there’s room for improvement.

Vendor Performance Management

Vendor performance metrics are part of a wider vendor performance management strategy. They are used in conjunction with a vendor performance management framework that outlines a company’s key goals and objectives, and what value they’re hoping to receive from various vendors.

A management strategy might include a vendor performance evaluation checklist, which lists the criteria taken into account when evaluating supplier performance. A supplier performance monitoring format might also involve a series of supplier measurement techniques—these, as their name suggests, detail the methods and techniques that might be used to measure supplier impact. Other vendor performance review examples include CIPS supplier performance management.

The takeaway here is that vendor performance management best practices can be applied across a wide array of strategies and vendor management methods. The most important thing to keep in mind is that a solid strategy captures a holistic view of the value a company expects to receive from their vendors, and then how that value can be measured and achieved over time.

When using supplier performance metrics within a larger framework or strategy, you should bear in mind the various aspects of your business operations and how your vendor’s performance will impact each one. While vendor metrics are certainly useful on their own, they can provide even greater value when paired with a broader strategy that encompasses other areas of the business. Each process inevitably ends up affecting another, so it’s important to consider vendor performance metrics within the context of your business as a whole.

Remember, too, that these metrics allow you to find areas for improvement. Just because your supplier may not be performing to standard does not mean there is no value to be gained. With a clearer understanding of performance, you can collaborate with vendors and make adjustments to be more successful.

Vendor Performance Manager

Monitoring vendor performance can be challenging at times, as there are so many different moving components involved. This is why many large enterprises have begun introducing a new role to their organizations: the vendor performance manager. The vendor performance manager works closely with vendors to assess performance and make changes as necessary.

They might use a contractor performance evaluation form to track the performance of contract suppliers, and create a vendor performance evaluation report—or supplier performance report—after the fact to detail the extent to which a vendor was able to meet certain objectives. In addition, a vendor performance manager might use something called a supplier performance index, which can be used to measure the overall cost of doing business with a vendor. It can also measure other important factors, such as the data related to the product or service supplied by your vendor.

The role of a vendor performance manager has become more important as businesses adopt a greater number of suppliers in increasingly complex ways. It can be useful to have a designated person whose sole job is to monitor vendor performance metrics and communicate with suppliers to achieve desired business outcomes.

Key Performance Indicators for Suppliers

KPIs (key performance indicators) are used to evaluate the success of an organization or its progress towards meeting an outlined goal. Key performance indicators for suppliers measure how well a supplier is doing in a number of different areas. In other words, KPIs can be used to measure performance in an objective way.

There are several different examples of vendor KPIs, but one common category is sustainable procurement KPIs. These metrics measure a company’s success in meeting

a specific quota for goods and services in the most sustainable way possible—in other words, getting the maximum value from a vendor while maintaining the lowest environmental impact.

Procurement performance measures examples may include the number of raw materials a vendor is able to deliver to a manufacturer, or the efficiency of a supplier in delivering sustainable materials for construction project. These procurement key performance indicators are useful in monitoring whether vendors are delivering on their promises. Simple purchasing KPIs are also related to procurement.

A procurement KPI template excel sheet is a great way to keep track of your vendor’s procurement performance. Consider using a template to outline quantitative data that can be used later down the road to assess the effectiveness of a vendor in helping you get your business closer to its goals and objectives.

Supplier KPI examples are extensive and should be carefully thought out when drawing up any sort of vendor performance metrics strategy. A supplier performance KPI can offer tremendous insight into whether or not specific vendor partnerships should continue long term. This is especially true in the case of cost reduction KPIs, which are used to track overall costs and measure the potential savings that could be achieved through various cost and procurement management techniques. Cost reduction KPI examples include the amount saved using one product/service over another.

Supplier KPI Scorecard

Although metrics are a valuable tool for measuring performance, they alone are not enough, and businesses often use scorecards to weigh the metrics that matter most and to help them gain a holistic understanding of vendor performance. Supplier scorecard criteria will vary, depending on the type of vendor you’re using and the metrics you’re trying to quantify.

A procurement metrics scorecard, for instance, can help businesses track their procurement procedures and determine what is worthwhile and what isn’t. Supplier scorecard categories include a number of relevant factors that a business must look at to determine the true value. Vendor scorecard criteria, or the supplier scorecard criteria, might also display how well a vendor met pre-established levels of service in various areas of your business.

A vendor scorecard dashboard might also be useful to help companies keep track of performance data and access it in a convenient, centralized location. Alternatively, supplier scorecard metrics may be compiled into a supplier scorecard PDF, making it easy for all members of your organization to view and understand.

More than anything, a supplier KPI scorecard is useful for tracking and assessing the most important vendor metrics to your business.

Vendor Performance Metrics Template

There are multiple different vendor performance metrics templates to choose from, each of which serves a slightly different purpose depending on functional area and industry. Using a vendor performance metrics template can make things a lot easier for businesses just starting out.

A procurement scorecard template is used to measure procurement. Using a free vendor scorecard template excel sheet, businesses can easily create and edit vendor scorecards. A supplier performance scorecard template XLS sheet, on the other hand, can be used as a file extension for documents created in Microsoft Excel and exported elsewhere.

Other possible templates include:

• Vendor performance scorecard template excel sheet
• A vendor scorecard template smartsheet that automatically updates based on supplier data.
• Service provider performance evaluation template
• Vendor performance scorecard template
• Contractor performance evaluation template excel sheet
• Vendor performance evaluation template xls sheet
• Supplier KPI scorecard template
• Supplier performance scorecard template excel sheet
• Vendor performance evaluation sample
• Supplier performance measurement pdf
• Supplier performance evaluation pdf
• Supplier scorecard template free sheet

Clearly, there are a wide variety of templates and sheets you can utilize to scale your vendor performance evaluations. Different businesses and industries might use different templates for different purposes. For example, a social media company might create a vendor scorecard template in excel to help them measure various KPI criteria in a quantitative way. A home improvement store such as Home Depot might use a supplier scorecard to focus on compliance with shipping requirements.

The bottom line is there are multiple ways you can use metrics, scorecards, templates, and more to assess vendor performance. It all comes down to your specific business needs and what will help you be most successful..

MetaCX offers a simple, streamlined solution for operationalizing vendor performance metrics. Using the platform, you and a vendor are able to come together in a co-owned digital space to align on initiatives and desired outcomes, create mutual action plans, and establish evaluation measures to track performance. Learn more about how MetaCX can help with vendor performance management today by requesting a demo.