Measuring a supplier’s adherence to contractual service levels is at the core of supplier performance management. Yet, while every organization tracks key performance indicators (KPIs) on some level, this data is rarely correlated with key risk indicators (KRIs) because many organizations track a supplier’s physical risks and digital risks separately.
Considering the potential of a business disruption resulting from recent economic-related supplier instability, now is the time to look across the organization, define a common set of supplier KPIs and KRIs, and unify reporting and monitoring for a more comprehensive view of supplier performance.
Four Tips to Unify Teams Around a Common Set of KPIs and KRIs
Each department involved in managing an aspect of a supplier relationship will have its own set of KPIs and KRIs to measure. For instance, engineering teams may focus on a supplier’s ability to meet technical specifications; procurement on their business viability; IT security on controls to protect sensitive systems and data; and compliance on reporting and regulatory audits. What results are silos — each team focused on their risks and performance measures, with no…
