Supply Excellence — The Business Case for Supplier Performance Management

The Business Case for Supplier Performance Management

April 18th, 2007 · by Tim Minahan · No Comments · Top 5 Supply Strategies, best practices, supplier management, supply risk

Last week’s post showcased hard-hitting advice from industry veterans from Denali Consulting and Constellation Brands on the pitfalls of supplier performance management. One challenge left off that list: how to build a compelling business case for investing in a supplier performance management program and supporting technologies.

In the Jumpstarting a Supplier Management Program web seminar, Denali President Dawn Tiura bluntly stated: “A program is useless if you cannot show quantifiable bottom-line impact.”

When pressed for how to quantify the impact of an effective supplier performance management program, Dawn didn’t blink: “The business case is real simple. Supplier performance management provides me with uninterrupted supply. It enables me to establish sustainable supplier relationships. And, our research and working with our customers shows, that it can drive 3% to 6% total supply chain cost reductions through continuous improvements.”

In today’s volatile and inflationary market, a business case built on supply stability and reduced supply chain costs should be quite compelling indeed. If this message doesn’t resonate with your CEO or CFO, you should consider working for another company.

Get more advice on how to launch a successful supplier management program, by downloading the complete web seminar here.

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