Supplier Management

Supplier Management is responsible for providing the required quality and througput to deliver defined services through a third party. Oftenly this correlates to near-shore or off-shoring attempts to leverage cost benefits. 

Scope

Supplier Management ensures a continuous service quality for the business, while delegating the activities to other parties. Therefore they also optimize the cost-benefit ratio through suppliers based on their performance. This is achieved through an allignment of supplier contracts with business needs and Service Level Agreements and supervision of supplier performance.

Supplier Management highly collaborates with:

Activities

Supplier Management manages all supplier related topics:

These activities require to be compliant to given policies:

  • Guidelines for communication and communication channels during proposals, negotiations and operations
  • Roles and responsibilities
  • Rules for gifts, promotions, etc. (corruption)
  • Standards for headquarter locations or compliance (e.g. Germany regarding data privacy)
  • Standards for contracts and reports
  • Policies for access in correlation with IT Security Management

Critical Success Factors

The following items are examples:

  • CSF: Shelter for the business from bad perfromance of suppliers
    • KPI: Breached Underpinning Contracts / failed aims of contracts
  • CSF: Supporting services and their aims are geared to business needs
    • KPI: Amount of Underpinning Contracts, which are geared to Service Level Agreements
  • CSF: The availability of services does not correlated to the performance of suppliers
    • KPI: Amount of breached Service Level Agreement through supplier
  • CSF: Clear understanding and responsibility for suppliers and contracts
    • KPI: Amount of supplier with defined supplier manager as functional counterpart (analogous to Business Relationship Manager)
    • KPI: Amount of contracts with defined Contract Manager for maintaining contracts