Top 5 steps to strengthen supplier performance

Building a good rapport with your suppliers enable successful partnership that is created on the basis of trust, loyalty and respect.

In this 21st century that we live in, working together to be innovative and to keep cost at the minimum is a profitable and smart way to run a business. If you want strengthen your supplier performance and reduce cost of raw materials then the foremost and basic thing you need to understand is the importance of a purchase order. With a “purchase order” in place you can compare estimated and actual shipped and delivery dates, quantities shipped, SKU level tracking, and split PO. This way it becomes easier and cost-effective way to manage and strengthen suppliers performance. Although, maintaining purchase order has an important contribution towards supplier performance, there are some other factors to be considered too.

Below are top 5 steps that you need to consider for an effective supplier performance management:

5 steps supplier performance

1. Implement regular inspections

It is important for you to inspect all raw materials that are delivered. A purchase order makes this task much easier and accurate. With a PO, you can ensure that the raw material received meets specification that was set at the time of purchase. So, if at all the specification does not match you can return the stock on the basis of a PO in turn avoids losing money and you can evaluate your supplier on such basis for a future call.

2. Analyze your supplier’s performance

Analyzing and measuring your suppliers performance (based on delivery, quality and performance) in-house and sharing the results in person when you meet them will help you better inform your suppliers. Discussing important informations that includes delay in deliveries, stock updates, unfulfilled orders, or technical problems with your suppliers in person will increase rapport and strengthen supplier performance.

3. Rate and reduce the number of suppliers

Limited suppliers will control costs and eliminate troublesome suppliers in turn increase efficiency of your purchasing and administrative staffs. If you aren’t sure which ones to eliminate, then the best way is to start evaluating the performance of each supplier rating them based on factors such as unreliability, late delivery, high cost and communication gap. This way you can evaluate suppliers performance and make better decisions.

4. Organize regular meetings

One of the critical key to strengthen supplier performance is to meet them in person on frequent basis. Personalizing the relationship like this and getting to know one another creates a strong partnership. It’s also important to be honest and upfront with your suppliers, highlighting their ratings and performance review results about your needs so they can perform better and know what areas to improve in order to keep you happy.

5. Keep your suppliers better-informed about your objectives and KPI’s

The most simple, perhaps an important way to strengthen supplier performance is by inviting them to your strategy meeting, business events or even parties, sharing your objectives and KPI’s. Likewise you should also make it a point to visit your suppliers office and know in and out of their business. This way creating a firm rapport between you and your supplier will automatically strengthen supplier performance.


Keeping your suppliers in loop is the best way to ensure a smooth supplier performance and helps you enhance your business. Investing in a high quality software will be of great help, but considering the above steps will help you build even better relationships with your suppliers in turn increase suppliers performance management effectively.

You might also like: 5 Must-have features in an order management software


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