Managing a Crisis Simulation
Managing a Crisis Simulation
Managing a Crisis Simulation
Supplier Performance Improvement Plan
For an organization to achieve its maximum performance in supplying building materials to its clients, it is imperative for there to be a strategic plan to analyze the supplier performance in order to improve in the areas that are lacking. In this case, the supplier performance improvement plan is of prime importance. This is because due to the complacency exhibited by the supplier, the company is on the verge of loosing its esteemed clients (Cokins, 2004). The needs of the client must be met as it is central and fundamental facet of the company. Due to this, there is need for an improvement plan to be developed that will address the supplier performance and ensure that the suppliers adhere to the requirements stated by the company (Harrington & Lomax, 2000). Within the plan, communication will be achieved in terms of ensuring that the suppliers are aware of the purchasing strategies, criteria, and policies for management of the supplier base. The main aim of the plan will include
- determination of preferred suppliers through critical analysis
- Improvement of the working relationship between the company and potential and current suppliers. This is in order to improve performance and its standards.
- Directing focus to business with the selected suppliers as a mean of establishing a long-range strategic relationship that will be based on service, delivery, and quality.
Through channeling the business to the suppliers, the company is able to determine their competent ones (Harrington & Lomax, 2000). This enables the company to scale down on the suppliers hence achieving the optimal size. The paper provides a plan through which the company will be able to manage the supplier crisis it is currently facing therefore managing the crisis without loosing its clientele.
First Step: Establishing a Supplier Quality Assurance System Approval
The first step involves the supplier being evaluated by an authenticated Quality Pre-Award System Survey abbreviated as QPASS. The test should be conducted when the company receives requests from potential suppliers. The questionnaires that are provided to the supplier are filed and reviewed for submission (Harrington & Lomax, 2000). This should assist the company in determining the suitable suppliers to contract for the job.
Second Step: Establishing Supplier Performance Report
This form of report is effective is ensuring that the suppliers performance undergoes continuous improvement. As a driving force, the report elaborates on performance of the suppliers in order to determine their compliance. Prime elements that are evaluated in the report include delivery competency, quality and service (Heizer & Render, 2014). The information in the report is on a subjective and objective based evidence that has been gathered during the reporting and evaluation period., the issuance of the report can be undertaken mid-yearly accompanies with the supplier rating indicating the performance of all the evaluated supplier. Exceptions that can be made in terms of the types of suppliers or outsourced staff that is involved includes travel suppliers, consultant, traffic suppliers, and contactors. The test should be provided by the company to the supplier (Heizer & Render, 2014). The questionnaire test can be filled either online or on site. After the completion of the questionnaire, the prospective suppliers should be requested to submit it to the company for review and rating. The means through which a serous supply will access the rating by the company is through purchasing which will allow them to view the completed copy of the test.
Step 3: Supplier Ratings
The company should develop supplier ratings to guide their selection of suppliers for specific duties they want done (Cokins, 2004). The categories that will be included in the ratings should include conditional, satisfactory, and unsatisfactory. For the available and prospective suppliers, they will each receive a conditional status (Chan, Kwan & Wong, 2005). The status is meant to motivate the supplier to aim at achieving the highest ratings in order to be contracted for more work and supplies.
- Conditional Ratings
Suppliers with conditional ratings are characterized by acceptable performance. However, the downside of their performance is that they occasionally fail to meet the expectations of the company in terms of supplies (Chan, Kwan & Wong, 2005). For this category of suppliers, the company should aim to seek supplies from other sources prior to finding suppliers that indicate high performance in order to meet the business needs of the company.
- Satisfactory Ratings
Satisfactory ratings are awarded to suppliers who have reached high or rather superior performance (Cokins, 2004). For the company, these are suppliers the company should associate for suppliers’ provision. Such a relationship between the suppliers and company is likely to transform into a partnership. To identify the satisfactory suppliers, the major trait is offering the best value to their employees. Focus should be directed towards such suppliers as they assure
- Unsatisfactory Ratings
These suppliers have low commitment levels and poor performance. For new product supplies, these suppliers should be considered. The company should be able to identify such suppliers in order to assist in increasing their performance levels (Chan, Kwan & Wong, 2005). For identification purposes, the company should evaluate suppliers with low production efficiencies and creates losses for the company. It is advisable for the company to source for alternatives for suppliers who fail to meet the requirements of the company (Cokins, 2004). To ensure that suppliers are compliant, the company should implement Corrective Action Board (CAB). This Board is in charge of reprimanding suppliers that fail to meet the company’s requirements. Uncommitted suppliers are those who receive three consecutive ratings that indicate that their performance is unsatisfactory.
Step Four: Providing Supplier Benefits to Preferred Suppliers
Companies benefit immensely from suppliers that are committed and dedicated to their duties and responsibilities. Their hard work translates to increased business as well as fostering of a long-term strategic relationship with the company (Chan, Kwan & Wong, 2005). For this reason, it is important to ensure that their performance is continuously motivated and improved. This can be achieved by providing benefits in order to motivate them (Cokins, 2004). Additionally, the benefits are a form of incentive due to the reduction of total costs incurred onto the company as well as increased fiscal benefits the company receives from their customers. The supplier benefits that the company should provide include
- forecasting on shared market demand
- recognition of top performing suppliers
- development of mutual specification in supply chain
- high probability of increasing suppliers businesses
- contracting suppliers for long terms purchase agreements
- applying improved processes in supplying to reduce the cost implications on the supplier
- improvement of processes of supplying by the company in order to improve the quality of the products supplied by the company
In summary, the supplier performance improvement plan involves rating the suppliers in order to identify their performance levels. This is imperative in enabling the company to identify suppliers that are causing fiscal losses.
Chan, J., Kwan, R., & Wong, E. (2005). Quality management. Singapore: World Scientific.
Cokins, G. (2004). Performance management. Hoboken, N.J.: John Wiley.
Harrington, H., & Lomax, K. (2000). Performance improvement methods. New York: McGraw-Hill.
Heizer, J., & Render, B. (2014). Operations management. Boston: Prentice Hall.
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