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Why supplier performance is key for commercial success.

Updated: Jun 3

Optimising supply chain performance is key in tackling risks and driving commercial success, especially when buying and managing services.

When buying services 80% of the risk is during delivery. You are buying a promise to deliver in the future, not a product you receive now - and it is often how teams work together that defines success. Providing early data-driven insights on performance enables teams to spot problems early, before they create commercial risk, and get projects back on track.

Having managed large accounts & hundreds of projects I know first hand that one of the most difficult parts of managing supplier relationships is that performance is never black and white, it is down to to how well each unique teamworks together. After all, everyone on a project team sets out to do a good job. But we are all human and problems happen.

And given that projects are a team sport - it is critical that performance reviews are two way. Enabling suppliers to say what's working and not - as well as client teams. As to drive performance we all play a part. McKinsey highlight the criticality of this in driving value:

"Introducing a clearer governance structure for the overall supplier-collaboration program and for individual projects has the potential to significantly improve outcomes in most organizations. Two-way scorecards, for example, allow buyers and suppliers to let each other know if they are effectively supporting the goals of the program."

Source: McKinsey "Taking supplier collaboration to the next level"

Data on performance is also critical when tackling perceptions. Levelling the playing field - by using the same metrics to compare SMEs to larger firms. After all, it is not just SMEs who are innovative - or large companies that have good quality controls. It enables each company and team to be assessed on their own unique strengths.

See rich insights on supply chain performance | performance insights

Likewise when problems occur, having rich data on performance makes it easier to investigate what can be done & to get projects quickly back on track. There are myriad reasons why a project can underperform, each of which requires a different response:

  • Is it the supplier's company? Are they missing the policies & procedures to manage the quality of delivery across teams?

  • Or is it the project manager? Perhaps managing a new type of project for the first time? Or finding it hard to balance work in the new hybrid world?

  • Or is it that there are compatibility issues across the project teams? Between those client-side who are leading the project and the suppliers who are delivering?

  • Or have you changed your priorities? Perhaps the team just haven't quite caught up with a change in focus to something different in the time / cost / quality triangle?

Taking a systems approach to understanding performance builds the foundations to deliver strong partnerships with your suppliers to drive innovation and growth - with each team knowing, and working to their strengths.

Achieving this, while reducing cost is where technology comes in. At IAND we fully automate the full 360 feedback process, so you can see performance from each individual contracts to trends across your supply chain. The admin is done for you so you have the insights at hand to drive performance. Helping you build stronger supplier relationships & deliver better projects. Every time.


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