L5M4 (1.2)

Question 1

• Advantages of measuring and monitoring supplier performance

Answer 1

• Identify performance problems early
• Drive continuous improvement
• Praise good practice and giving constructive feedback can improve supplier relationship

Question 2

• Disadvantages of measuring and monitoring supplier performance

Answer 2

• Can be time consuming
• Can be costly
• Negative reporting on performance can damage relationships with suppliers.

Question 3

• Three aspects of performance management of suppliers

Answer 3

• Analysing the suppliers
• Measuring performance
• Managing the supplier

Question 4

• Supplier performance monitoring typically occurs in three ways

Answer 4

• An integral part of an existing contract
• Part of the process of managing approved supplier lists
• Part of the supplier appraisal process when an existing supplier is competing for the renewal of a contract.

Question 5

• Gordon 2005 proposed the following seven steps for the development of an effective supplier performance management system:

Answer 5

1. Align supplier performance goals with organisational goals.
2. Determine an evaluation approach.
3. Develop a method to collect information about suppliers.
4. Design and develop a robust assessment system.
5. Deploy a supplier performance assessment system.
6. Give feedback to suppliers on their performance.
7. Produce results from measuring supplier

Question 6

Further five:

Answer 6

● Increase performance visibility
● Uncover and remove hidden waste and cost drivers in the supply chain
● Leverage the supply base
● Align customer and supplier business practices
● Mitigate risk.

Question 7

● Collate and analyse data

Answer 7

○ Gathering feedback from internal and external customers and other stakeholders
○ Gathering performance through observation, testing, etc.
○ Budgetary control - monitoring of actual costs against budgets
○ Formal Performance reviews or appraisal
○ Contract Management - continue monitor compliance
○ Meetings
○ Project management
○ Consultants
○ Technical specialists

Question 8

● Measure supplier innovation against agreed matrix

Question 9

○ Innovation does not have to relate to a new invention, it could relate to:

Answer 9

■ Increased efficiency
■ Reduced risk
■ Improved product design & quality
■ Lower costs

Question 10

○ Innovation can be classed in three different ways:

Answer 10

■ Incremental
■ Radical
■ Discontinuous