One of the common reviews within a supply chain environment is the supplier review.
A well run supplier review can benefit both parties. While suppliers are generally trusted to get on with the work of supplying parts a business review allows for both parties to get together to review things like performance, issues, and risks.
Done well the PMR (Performance Management review) can drive improved supplier performance and commercial compliance and also help reduce risk.
In developing an agenda, the contents will vary depending on the criticality of supply and aspects like spend and demand but are usually based on the following points.
1/ Business updates
The section allows both customer and supplier to update each other regarding new information relating to their businesses, it could be about new products, organizational change, goals, and targets but it allows both parties to be up to speed with what’s happening.
2/ Performance
Usually driven by a metrics review, performance reviews may include quantitative measures such as on-time delivery. This helps both parties understand whether key requirements are being met.
3/ Risk
This section covers discussion on key risks affecting supply together with associated mitigation
4/ Opportunities for improvement
Any business review should include business improvement ideas and actions – this looks at what steps can be taken to improve the relationship and performance and usually involves actions being taken by both parties.
5/ Demand/Schedule forecast
This section endeavors to look at the long-term view of requirement. This is usually done via a forecast this may be short or long term but provides the opportunity for both parties to look at what’s coming up.
6/ Overdues
This section enables both parties to look at those orders that are outstanding. This enables the supplier to advise the latest information regarding the deliveries, what issues remain and what actions are being taken.
7/ Quality
Again this section may be led via looking at KPI’s. Alternatively, it might be driven by looking at specific issues or non-conformities.
8/ Commercial
This section looks at commercial compliance and requirements.
9/ Voice of customer / Complaints
By having a section dedicated to reviewing the direct thoughts of the customer it allows the customer’s expectations to be voiced and contrasted with perceived performance. This section allows for formal complaints to be put across.
10/ Actions taken
Finally, this allows for a review of the actions taken, action owners and target dates to be reviewed and agreed.
So there are our 10 items for supplier reviews. Have some of your own? Let us know your ideas in our comments section below.