How do you measure partner and supplier performance?

1 Define performance criteria

The first step to measure partner and supplier performance is to define the criteria that matter most to your business goals and needs. These criteria should be aligned with your contract terms, service level agreements, and key performance indicators. You should also consider the quality, cost, time, and risk aspects of the partnership or supplier relationship. Some examples of performance criteria are customer satisfaction, delivery accuracy, innovation, compliance, and responsiveness.

2 Collect and analyze data

The next step is to collect and analyze data that reflects the performance of your partners and suppliers. You can use various sources of data, such as surveys, audits, reports, feedback, and metrics. You should also establish a regular and consistent process for gathering and reviewing the data, and ensure that it is accurate, reliable, and relevant. You should use data analysis tools and techniques to identify trends, patterns, gaps, and opportunities for improvement.

3 Communicate and collaborate

The third step is to communicate and collaborate with your partners and suppliers to share the results of your performance measurement and evaluation. You should provide constructive feedback, recognition, and suggestions for improvement. You should also listen to their feedback, concerns, and ideas. Communication and collaboration are essential for building trust, transparency, and mutual understanding. You should also involve your partners and suppliers in setting goals, action plans, and expectations for the future.

4 Benchmark and compare

The fourth step is to benchmark and compare your partner and supplier performance with industry standards, best practices, and competitors. Benchmarking and comparing can help you identify your strengths and weaknesses, as well as the areas where you can learn from others or differentiate yourself. You should use objective and relevant sources of information, such as industry reports, market research, customer reviews, and awards. You should also use benchmarking and comparing as a way to motivate and challenge your partners and suppliers to excel.

5 Review and adjust

The final step is to review and adjust your partner and supplier performance measurement and evaluation process periodically. You should check if your performance criteria, data collection and analysis methods, communication and collaboration channels, and benchmarking and comparing sources are still valid and effective. You should also monitor the impact of your performance measurement and evaluation on your business outcomes, such as revenue, profitability, customer loyalty, and innovation. You should adapt and update your process as needed to reflect the changing needs and expectations of your business and your partners and suppliers.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?