Question

What is meant by "Cost/Price, Quality, Delivery, Responsiveness and Flexibility, Technology , and Total cost of Ownership" in Supplier Performance Metric. How are they important in Creating and Managing Supplier Relationship?

Answer 1

The given entities like Cost/Price, Quality, Delivery, etc. are the metrices over which the performance of the suppliers can be evaluated. The companies get biddings from various suppliers. Based on the past performance data of the suppliers, which is nothing but a combination of the above mentioned data, the companies make a choice about the supplier.

These metrices facilitate both creation as well as management of supplier relationship with the business:

• Based on these metrices, companies make a selection of the supplier and thus facilitates the creation of supplier relationship with business
• Every supplier has a limited contract with the company. AT the end of the contract, the performance metrices are reviewed to renegotiate another deal with the supplier.