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supplier performance directly affects the performance of the procurement department,its effect is the same as clean healthy water to our body's health.
Schelussel. The key to success. The dead, inefficient, poor performers will be highlighted and the new quality companies will be given chance. What more?
Vendor rating considering following factor –
01) Quality supply
02) Delivery- On time
03) Price – competitive
Impact –
01) Vendor rating helps to decide the future course of action which is decided based on performance of the supplier though out
02) Supplier performance enhance efficiency and its effectiveness of procurement team which leads to organization performance
03) By analysing the performance of the supplier , we will come to know the strengh and weekness of the supplier which will help you while negotiaing of price
05) By analysing the supplier, we can target his weakness and try to develop him as good as a associates
04) Helping to improve the market position due to product high quality, cost
Suppliers performance might effect your internal process directly or indirectly which will lead to lack of customer retention and it will further effect your strategic goal (Finance etc).
Management of supplier's performance would help the company deliver product(s) to end users faster and smoother (reduce the delay time from suppliers). Also, supplier's management is essential for quality control and reduction of bottle-necks. Most importantly, is the reduction of overhead costs from suppliers (i.e. errors in shipment, inventory...etc.)
· Contract management
· Compliance with delivery schedule
· Completeness of the task
· Encouragement for the supplier to dispatch his duty faithfully and not to default on his obligations