Supply
Chain
In any supply chain, vendor performance and purchasing department productivity are similar. While a vendor performance will depend on price, delivery and quality, the purchasing department might also have the same measures but differing acceptable levels. In this example, the Dollars Purchased are above the plan as is the Cost Reduction, but there has been a sacrifice of Ontime Delivery and Quality (% defective) to accomplish this. Vendor satisfaction is great (dollars are up) but satisfaction with the vendor is in the yellow. Who is getting the good deal here? By setting up appropriate measures with the vendor it is easier and less time consuming to address issue. The relationship is focused on a win-win relationship.
