Supplier performance assessment

Abstract

Purpose The discussion of supplier performance assessment and implementation challenges has been evidenced well in the academic literature. However, the analysis of supplier performance assessment has been limited in terms of inclusion of suppliers’ perspective, especially in terms of what key performance indicators they deem to be relevant and aligned with their goals. Therefore, the purpose of this paper is to shed light on supplier performance assessment, taking into account both manufacturing company’s and suppliers’ perspective, to evaluate to what extent the utilised performance measures are beneficial to all parties. Design/methodology/approach Based on literature review on supplier performance assessment, ten categories of performance measures were established and explored in a case study involving a UK manufacturing company and its suppliers. A questionnaire was distributed to the manufacturing company and their 30 suppliers, resulting with a total of 41 responses. Findings From the established ten categories only five categories were highly rated which were: net profits, flexibility and responsiveness, delivery performance and time and cycle time, product quality and availability, which were aligned to financial and internal business process categories. Research limitations/implications This study focused on a UK-based company and its relationship with its suppliers and how performance measures were assessed within this context. A further study needs to be conducted in terms of comparing the results of the study to other companies’ supplier performance assessment. Originality/value The research on the topic of supplier performance assessment often relates to measurement and highlights measures for assessing suppliers’ performance to a particular industry or area of performance measurement. Hence, this study embeds three distinctive angles including the academic literature on supplier performance assessment, suppliers’ and the manufacturing company’s perspectives.