Business Intelligence Blog from arcplan

The Case for Supply Chain Quality Management: Part 2 – The Challenges to Measuring Supplier Performance


Last time, we discussed the benefits of measuring supplier performance and established that the practice is crucial to an organization's bottom line. Today, we're discussing the challenges to measuring supplier performance.

Industry experts suggest that only half of supply chain quality managers effectively measure their suppliers. In speaking with our clients, we've uncovered the following challenges that stand in the way of effective measurement of supplier performance:

  1. There is a lack of actionable information. Many companies do not have an intuitive way to access information in ERP or other databases and present them in one dashboard or scorecard with the ability to drill down to the supplier or even PO level. Problems are often compounded when key data reside in more than one data source.
  2. Data are not timely. Many companies rely on spreadsheets to collect quality data from plants, which cause inconsistencies and delays.
  3. Reporting is inconclusive. Without a way to aggregate quality and supplier performance information, it is impossible for management to monitor trends and compare leading performers to lowest performers.
  4. Data are neither conclusive nor complete. Supply chain quality managers rely on word of mouth from plant managers and on-site quality engineers to assess performance.
  5. Qualitative information is not captured. Many reporting systems do not provide for the qualitative information that is so important to supplier quality management. Information about site visits, best practices, action plans, etc. must be a part of the overall Supplier Performance Management application.

Are you experiencing these or other challenges in trying to measure your supplier performance? If so, we'd love to hear from you in the comments. Next time, we'll outline how to establish a fact-based culture within your supplier quality team.

Kathleen Rohrecker

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