How to achieve high supplier performance

Interventions to boost supplier performance

We asked participants in our 2023 procurement research titled Geared to High Performance, how they would rate the average performance of their suppliers within a specific category (refer Figure 1). We asked for a general score between 0 (no performance) to 10 (high performance).

Figure 1: Average performance of contracts

 

The research participants in general found that the more avenues to influence the performance of their service providers they use, the better the performance. Those participants who achieved good performance used on average eight interventions, those who received acceptable or underperformance used only five interventions.

We found that the following five interventions made the biggest difference on supplier performance:

• We make efforts to understand the supplier’s business and aspirations
• We have processes and systems in place that support our staff managing suppliers
• We regularly educate our suppliers on the strategy of our business and share information on our pipeline of work coming up > We help suppliers develop their own business
• We are specific about what good performance looks like and we assess and manage the performance of our suppliers.

Table 2 has a complete list of interventions used by participants. The Performance Boost column indicates what additional performance clients receive who use this intervention versus those clients who do not use the intervention

If you are interested in additional practical tips for how to set up your contract management for success, book a chat with Stefan Gassner