Improve Your Purchasing Process with Sales Performance Evaluation for Purchasing

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hello and welcome to understand of our procurement training our training today is a train topic today is managing supplier performance managing supply performance is key to improvement of suppliers performance introduction supply performance is critical to all organizations it's a platter performs well can help our organization be more efficient produce higher quality product or services reduce cost and increase profits it's a player does not perform well can be strata operations make our organization feel in the eyes of our customers increase our cost and threaten our profits managing the performance of suppliers therefore should be important to every organization this course will teach you how to evaluate - supplies by humans and use it to implement supplier development program what is supplier performance measurement supplier performance measurement are tools or techniques to determine whether your suppliers are doing their work as expected and what is expected of the supplier should be as described in the contracts the supplier contract or statement of work as it guess maybe it could also be what is in this specification that is attached to the contract drawings or designs they could be what is inserted in the service level agreement or what we call key performance index key elements in evolution program the three main elements involved in supplier measurement program one suppliers demo dis applies supplier should be those ones that you spend a lot of your money on you will do an analysis what they call spend analysis and identify these key suppliers that you spent more money on than others in fact there is a principle called Pareto principle or ABC analysis that says that 80% of your spend 80% of your money and Lockett allocated tooth to your pen is spent on 20% of his class so doing an analysis we enabled you to sort out those suppliers that window concentrate on then under set of supplies must concentrate on a to supply the supply key product or key services that without them use your your business can either go down or delay or grown into unnecessary cost you must put those suppliers on your evaluation program then the second thing in the evolution program is Rita's ratash we do support from Department that are using those particular items or those services you must include them in the rating program that you can use people from engineering and people from the supply chain unit which is probably including warehousing because they are receiving including procurement people because they ascended the purchase order so they should be together to help you do the rating then performance measures not to choose performance measures that are measurable that are specific that are achievable realistic and time-bound you don't your selects measurement criteria because you just want to measure you have to be able to to confirm the are things you can measure they are teens that are specific there are teens that are achievable realistic and with the attenuation could be one year could be six months as the case may be then companies may use different criteria to evaluate the performance of their suppliers for the key elements that are common to most organizations are quality quality performance measures relates to the conformance of product or service to requirements quality could be rejection rich you check with rejection rates over the quantity supplied warranty claims different times you have made warranty for claims technology to improve products services and other metrics that relates to durability that relates to reliability of the product that relates to consistency of product and services you must consider those things on the quality measurement then second one is price cost performance measures related to direct financial impact of the player's performance the price could be payment terms you could be favorable payment terms big and big can allow you pay two times three times or extended the time of payment with 60 days 90 days 120 days are the case may be and you know that money that your world is going to give you advantage then can give you favorable favorable price then the third one is probably shipping charges it can realize the shipping charges the supplier can use her own or its own delivery system and send the items to you without charging you then could be savings from process improvement it could be a supplier that is improving this process every day and you are benefitting from it then the third one is delivery delivery performance measures relate to supplies ability to support the organization on-time delivery is important here on time completion of services is important here stock availability and anything relating to reducing lead time now important things to measure on the delivery then the last is service service performance measures relate to the personal and electronic interactions between buyer and seller the this relates to responsiveness to resolution of problems open communication 24 hours communication with the supplier can help the buyer ask intelligent questions important questions solving problems relating to the product is applied then it could be technology use to provide customer service these are important areas to look on the service delivery as a category of measurements their methods of gathering information for the purpose of evaluation once you have made your decisions relatively three key elements of a supplier e-teens program that is suppliers rita's and performance measures you must decide how to acquire information about your performance measures one that is simple and less expensive is office supplies Kaka's are a common starting point for ganas Asians who wish to have some method of reaching their suppliers and supplier scorecards had developed indicating categories to evaluate each score card represents a Soviet or the written opinion of the suppliers performance for the selected performance measure this method is subjective and prone to errors and wrong judgment so it it must be used with some level of caution then the second the second is the valuation forms creating evolution forms and questionnaires this is the most efficient method to collect all those information true is a black Estonia or is supplier self assessment the advantages one has over the other method is like it is self assessments so the supply may not only tell lies in supply will tell easily what is the situation and most questions that are better mostly question that I assume that this is about experience of the supplier the possible player finishes trend or supplier certification at the end quality and quality management systems then they the Ted one is system matrix system it is the liberating method that has the potential to remove some of this objectivity from the supplier rating process and is used of metrics generated from your procurement system matrix as statistics that relates to performance measures this metric gather from procurement internal system it could be calculations based on quality quality from inspection incoming inspection and acceptance rates or complaints from users of the product about the quality while being complained from customers and you discover that it is based on proper order of material delivered to the company you fully talk and work out a percentage then under quality on the system metrics you can see the loop on-time delivery because the time that is there inside the purchase order is known and the day that it deliver the product is known you will know what is a lead late delivery or or le delivery so is it something that is not subjective is physical and you can add any fiber that is late or early delivery this is mostly used in production environments then the last is supply chain events management so platinum event management is based on the premise that specific written information is made available the purchasing and supply management department immediately upon the occurrence of such performance event the advantages has over scorecard and system matrix is timeliness of information activities are captured as the core and toes align buyers to take corrective actions to protect the organization these are videos on supply early lead time performance analysis after garden deformation you can use this watch this video and you will know how it is don't togather to translate those data into a useful information that the company can use or the buyer can use to discuss with the supplier or the or the supply of the original fitment a manufacturer the same thing here supplied with this car you just take them and look at them then after doing all these there is meat for you to then use what you have gathered to then perform her bleep the supplier perform well or improve the performance of those that I've been doing badly so there are two ways either motivating good performance that is rewarding the suppliers who perform well so d aspire to continue performing well this is important and the second way is correcting poor performance taking corrective action with those suppliers whose performance does not meet expectations it's important to do these two things and at the end of the day your system your suppliers we begin to improve congratulations want to congratulate on successful completion of this short course it has been understand Elena be the CEO of appraise procurement for pres procurement is a training procurement training platform that is seeking to improve the quality of our professional procurement people and we strongly advise that you have any question you have anything to discuss with us you can write a mail to us on for press procurement at gmail.com or you can call zero eight one seven three four two 1976 this we make make us have enough time to talk about how to improve what can help us I want to thank you and I pray that we'll meet again in safety