The contract and supplier management process is supported by robust information relating to the performance of the contract and supplier. This information can be obtained from the management information provided by the supplier and feedback from the customers on how they feel the contract and supplier are performing. It is also useful to ask the supplier to provide feedback on their and the contracts' performance which is not captured through the management information.
The balanced scorecard is a useful tool for ensuring that all feedback is consistent against pre-determined measurements. At the strategy development phase, the anticipated level of performance management should have been established using the contract and supplier management tool.
The level of management required will influence how the balanced scorecard is used:
The Invitation to Tender will have identified how frequently the supplier has to provide the management information. To ensure there is consistency when scoring the balanced scorecard it is important to provide the scorers with some guidance as to what level of performance equates to a specific score.
The example balanced scorecard, provides an example of the type of guidance (in the quality, service, delivery, cost worksheets) which would be used for a 'high level' contract but can be modified for 'medium and low level' contracts.
It will not be possible for the procurement team to manage every aspect of the contract and deal with every problem relating to the performance of the contract and supplier e.g. a late delivery. It is useful to have an escalation model which identifies when a problem should be escalated to the procurement team which will be documented in your contract and supplier management plan.
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