How to Measure Your Key Supplier Relationships

Presented by Steve Carter

www.A4Pe.com

Introduction

• You can only measure whether or not the programme is moving the relationship forward if you know where you started.

• This means you need to baseline your current relationship.

• What follows is one way to do it.

To read my article on this topic go to http://bit.ly/1b5ODfb

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The Components

• Agree the components of a good relationship.

• The starting point is to agree what constitutes a good relationship.

• Models such as EFQM can help because they identify the enablers of good performance (such as leadership, strategy and processes) and the results you can expect (such as people results and customer results).

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Measurement Scale

• Agree a scale. You now need to agree a scale that you will use to establish current performance in each of the factors you listed in step one.

• A typical scale is in five steps from "no performance" at the low end and "world class" at the high end.

• This results in a possible score of between one and five for each of the enablers and results.

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Describe Performance Levels• Write statements that describe how

you would recognise each level of the scale for each of the enablers and results.

• For example, a "no performance" score for "processes" might have the description "few processes exist apart from financial ones.

• Or “everyone does their best but fire fighting is the norm".

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Survey a Sample• Select sample for questionnaire.

• Now that you have completed the matrix of enablers and results versus a scale and written descriptions for each of the cells in the matrix, your next step is to have a number of people score the matrix in terms of how they see both organisations when working together.

• This sample needs to be a range of people who have experience of different aspects of the relationship and are from different organisational levels.

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Plot the results

• The results will measure where each organisation sits in relation to the enablers and results as seen by those actively involved in the supplier and buyer relationship.

• A spider diagram is an excellent way to present this and show the gaps.

• The image opposite is another example

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Validate the Gaps

• The analysis will give you an average score for each enabler and result but it will also show you the range of answers.

• You need to validate the extreme results by interviewing the respondents to understand why they gave that score.

• The answers should enable you to filter out biased scores but it may also give you an insight as to how you could close the gaps.

Want to know more … ?

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“Power Partners – How to unlock real and lasting value with your critical suppliers”

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