Supplier Management

A key step in building a strong supply chain for the organization is developing ongoing partnerships with the suppliers. Some of the tools available to develop these relationships include:

• Performance analysis.

• Supplier price comparison information.

• Certified supplier status.

• Agreed-upon terms.

• Item catalog costing.

To monitor the suppliers' performance, you should consider these key areas:

• Cost

• Delivery

• Quality

You determine cost based on the supplier with the best value and not on the supplier with the lowest cost. Delivery analysis is based on the number of days late as well as the number of days early that are agreed upon. Quality analysis evaluates whether the supplier has met the specifications for the items included on the purchase order after they have been received.