Supplier Performance

Question 1

What are the four stages of supplier relationship development?

Answer 1

The four stages are:
-selecting suppliers
-working together
-providing recognition
-developing the relationship

Question 2

Why is a documented supplier management process important?

Answer 2

It increases the chances of a successful partnership between the organization and the supplier.

Question 3

What does frequent monitoring of supplier performance prevent?

Answer 3

It prevents problems and promotes improvement.

Question 4

What are the leading supplier performance measures used by organizations?

Answer 4

Quality, Price, Delivery, Service or responsiveness.

Question 5

How can organizations determine a supplier’s overall performance?

Answer 5

By using a combination of data from each performance measure category and reporting using a scorecard approach.

Question 6

What process must an organization have to monitor supplier performance?

Answer 6

A process for collecting, analyzing, and reporting supplier performance data.

Question 7

What are some commonly used data collection and measurement tools?

Answer 7

Surveys and assessments, product quality and delivery data, complaints and corrective action data, cost and price data, incoming quality inspection data.

Question 8

An organization that chooses quality as a critical measurement for evaluating supplier performance are interested in?

Answer 8

Determining how well the suppliers product or services conform to the product specification or requirements

Question 9

An organization might look closely at the frequency of defective products, or maybe the percentage of service rendered with no problems to determine?

Answer 9

The percentage of service rendered without problems.

Question 10

An example of a property management company may categorize performance by?

Answer 10

Anything greater than 95% exceeds requirements, between 75% and 94% meets requirements.

Question 11

What happens when a supplier reaches Preferred status?

Answer 11

The organization does not have to inspect all of the supplier’s products and services because the supplier has proven to be consistent in quality and performance.

Question 12

What does a Tier Three certification rating signify?

Answer 12

A Certified rating means that the supplier is fully approved and has proven high performance and superior quality.

Question 13

What are the criteria for obtaining Certification and what is its purpose?

Answer 13

Certification is offered to suppliers that consistently meet or exceed customer requirements, practice quality at the source, and undergo a detailed assessment.

It is a recognition process promoting continuous improvement, cost reduction, and excellence.

Question 14

How is supplier rating determined using certification?

Answer 14

Certification can define a supplier as approved.

Certification can be obtained through one of four different methods:
1. Certification by the customer organization, according to standards it has defined for its suppliers.
2. Certification to a third-party standard, such as the ISO 9001 quality management system or an industry-specific certification standard.
3. Self-certification by the supplier according to its own internal standards.
4. Some combination of the other three methods.

Question 15

What is the purpose of a supplier performance measurement program?

Answer 15

It helps improve supplier performance, keeps communication gates open between the supplier and the organization, and helps identify a supplier’s opportunities for improvement.

Question 16

What metric is an organization focusing on when analyzing data from a call center service?

Answer 16

Service.

Question 17

Data from customer complaints would feed into which metric?

Answer 17

Price.

Question 18

Why are supplier ratings helpful for organizations?

Answer 18

Supplier ratings help organizations summarize overall performance of a supplier and provide additional input needed to determine a tiered approach such as approved, preferred or certified.

Question 19

What are the categories in the supplier rating scale?

Answer 19

The categories are Unacceptable, Acceptable, Superior, Poor, Fair, Average, Good, and Excellent.

Question 20

What is the purpose of supplier ratings?

Answer 20

Supplier ratings help organizations measure the supplier’s capabilities and performance from a high level.

Question 21

What does a Tier One rating signify?

Answer 21

Tier One indicates an Approved rating, meaning the supplier meets minimum requirements but has not demonstrated above average performance.

Question 22

What does a Tier Two rating signify?

Answer 22

Tier Two indicates a Preferred rating, meaning the supplier meets more than the minimum requirements but is not yet certified.

Question 23

What is a common source of complaints regarding suppliers?

Answer 23

Invoice errors as well as complex contractual agreements.

Question 24

What can result from complex contractual agreements and intricate billing procedures?

Answer 24

They can result in overbilling, lost money, and legal noncompliance for the organization.

Question 25

What are other sources of complaints regarding suppliers?

Answer 25

Shipping defects, poor workmanship, or not meeting delivery agreements.

Question 26

What falls under “Price” to measure overall supplier cost?

Answer 26

•The cost to reconcile statements
•Adherence to the monthly budget
•Number of customer complaints in response to billing errors
•Cost of repairs
•Cost to resolve issues or returned products.

Question 27

How is “Delivery” measured in supplier performance?

Answer 27

Delivery is measured in terms of ‘on-time’ delivery, focusing on the frequency of late deliveries and specific criteria like the number of days late or number of lots late.

Question 28

What factors should be considered when calculating on-time delivery?

Answer 28

Factors include whether on-time delivery is based on shipment date or receipt date, and whether the number of pieces, number of orders, or dollar values are used to calculate the performance score.

Question 29

How is “Supplier Performance Metric”
measured?

Answer 29

Technical assistance and the efficiency of the supplier’s customer service process.

Responsiveness for how flexible and cooperative a supplier is in meeting the customer’s needs, including their ability to adapt to changes and address corrective actions.

Question 30

What is a supplier scorecard?

Answer 30

A supplier scorecard is a tool used to summarize and present supplier performance data in a brief format, including measures like quality, cost, delivery, and possibly service and responsiveness.

Footnote: see example