{"id":38032,"date":"2024-08-22T00:00:00","date_gmt":"2024-08-22T00:00:00","guid":{"rendered":"https:\/\/itbid.com\/blog\/key-kpis-in-supplier-management\/"},"modified":"2024-08-22T00:00:00","modified_gmt":"2024-08-22T00:00:00","slug":"key-kpis-in-supplier-management","status":"publish","type":"post","link":"https:\/\/itbid.com\/en\/blog\/key-kpis-in-supplier-management\/","title":{"rendered":"Key KPIs in Supplier Management"},"content":{"rendered":"<p>Supplier management is key, as suppliers are strategic partners who influence quality, costs, and the supply chain.<\/p>\n<p>In a competitive and globalized business environment, effective supplier management offers significant advantages and aligns with the company&#8217;s objectives.<\/p>\n<p>How?<\/p>\n<p>Identifying and monitoring a set of key performance indicators (the well-known KPIs).<\/p>\n<p>We know that you may not have the resources right now to invest in a tool like our collaborative supplier and procurement management platform.<\/p>\n<p>But you can start step by step, by getting organized, implementing monitoring systems to detect critical failures, gaining greater clarity, and improving both quantitative and qualitative assessments.<\/p>\n<p>Because taking corrective action in a timely manner can make a big difference.<\/p>\n<p>So, let&#8217;s start at the beginning:<\/p>\n<p>KPIs are quantifiable metrics that make it possible to evaluate the performance of a specific process or activity.<\/p>\n<p>In the context of supplier management, KPIs provide:<\/p>\n<ul>\n<li>a clear and objective view of the status of relationships with suppliers,<\/li>\n<li>the quality of the products or services received and<\/li>\n<li>compliance with contractual agreements.<\/li>\n<\/ul>\n<h2>KPIs you should be concerned about as a buyer or purchasing manager in supplier management:<\/h2>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-32525\" src=\"https:\/\/itbid.com\/wp-content\/uploads\/2024\/08\/Indice-itbid-11-1.png\" alt=\"KPIs in Supplier Management\" width=\"2240\" height=\"1260\"><\/p>\n<h3>Meeting Delivery Deadlines<\/h3>\n<p>KPI: Percentage of on-time deliveries.<\/p>\n<p>Alert: A low percentage indicates problems with supply chain planning and execution, which can lead to production delays and affect customer satisfaction.<\/p>\n<h3>Quality of products or services<\/h3>\n<p>KPIs: Defect rate, return rate, customer satisfaction survey results.<\/p>\n<p>Warning: An increase in the defect rate or a decline in customer satisfaction may indicate quality issues with the products or services provided by suppliers.<\/p>\n<h3>Costs<\/h3>\n<p>KPIs: budget variance or savings achieved.<\/p>\n<p>Warning: Significant deviations from the budget or an increase in the total cost of ownership may indicate problems with negotiations, a lack of cost control, or changes in market conditions.<\/p>\n<h3>Supplier Financial Risk<\/h3>\n<p>KPIs: Key financial indicators for the supplier (profitability, liquidity, debt).<\/p>\n<p>Warning: A decline in the supplier&#8217;s financial performance may increase the risk of contract default or supply disruption.<\/p>\n<h3>Compliance with Contractual Agreements<\/h3>\n<p>KPIs: Rate of compliance with contract terms or number of breaches.<\/p>\n<p>Warning: Frequent breaches of contractual agreements can lead to legal disputes, financial losses, and damage to the relationship with the supplier.<\/p>\n<h3>Supply Risk<\/h3>\n<p>KPIs: Number of critical suppliers, concentration of the supplier base, supplier responsiveness to disruptions.<\/p>\n<p>Warning: A high concentration of suppliers or a low ability to respond to disruptions can increase the vulnerability of the supply chain.<\/p>\n<p>&nbsp;<\/p>\n<p>And once <a href=\"https:\/\/valerdat.com\/blog\/kpis-departamento-compras\/\" target=\"_blank\" rel=\"noopener\">you&#8217;ve identified the KPIs<\/a> you&#8217;re going to monitor, it&#8217;s time to:<\/p>\n<ul>\n<li>Define evaluation criteria to rank your suppliers from lowest to highest risk.<\/li>\n<li>Look for alternatives to anything that could jeopardize your supply chain.<\/li>\n<li>Review and update these lists periodically.<\/li>\n<\/ul>\n<p>Supplier management is a complex task that requires constant attention, and KPIs are essential metrics for evaluating supplier performance and making informed and TIMELY decisions.<\/p>\n<p>A collaborative platform\u2014or <a href=\"https:\/\/itbid.com\/blog\/en-que-consiste-una-plataforma-saas\/\" target=\"_blank\" rel=\"noopener\">SaaS supplier management software<\/a> \u2014automates many of your day-to-day processes, from selection and hiring to performance evaluation.<\/p>\n<p>By continuously collecting data, it provides you with tools and features that make it easier to identify and track the most relevant KPIs:<\/p>\n<h4>Custom dashboards:<\/h4>\n<p>View the most important KPIs in real time.<\/p>\n<h4>Automatic alerts and notifications:<\/h4>\n<p>Customizable notifications to detect when established thresholds are exceeded.<\/p>\n<h4>Predictive analytics:<\/h4>\n<p>Identifying trends and patterns that may indicate future problems.<\/p>\n<h4>Expert support:<\/h4>\n<p>Personalized guidance from procurement professionals on selecting the appropriate KPIs and interpreting the results.<\/p>\n<p>By using SaaS software with expert support, companies can significantly improve the efficiency and effectiveness of their supplier management, reducing costs, minimizing risks, and ensuring supply continuity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supplier management is key, as suppliers are strategic partners who influence quality, costs, and the supply chain. In a competitive and globalized business environment, effective supplier management offers significant advantages and aligns with the company&#8217;s objectives. How? Identifying and monitoring a set of key performance indicators (the well-known KPIs). We know that you may not [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[63,70],"tags":[],"class_list":["post-38032","post","type-post","status-publish","format-standard","hentry","category-articles-and-guides","category-supplier-management"],"acf":[],"_links":{"self":[{"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/posts\/38032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/comments?post=38032"}],"version-history":[{"count":0,"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/posts\/38032\/revisions"}],"wp:attachment":[{"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/media?parent=38032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/categories?post=38032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itbid.com\/en\/wp-json\/wp\/v2\/tags?post=38032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}