Boost Your Quality Control with Supplier Performance Metrics

If you’re like most companies, your supply chain spans time zones, countries, and continents. How can you see all the pieces at once to ensure high-quality and deliver goods on time? The secret to keeping your production on the right track is to set and monitor supplier performance metrics.

Below, you will discover what supplier performance metrics are, why you should be using them, and which ones you should be watching.

What are Supplier Performance Metrics?

Supplier performance metrics are simple tools you can use to track how your vendors are doing with critical, measurable tasks. 

You may also hear them referred to as vendor supplier metrics, supplier performance measures, or supplier key performance indicators (KPIs). Regardless of what you call them, they are tools for measuring your supplier performance to ensure that they are meeting your expectations.

A metric could measure quality control (QC) inspection success rates, factory productivity, or on-time shipping performance — anything that directly impacts the quality of your supply chain.

Why Should You Use Performance Metrics to Evaluate Suppliers?

The simple truth is that 47% of supplier collaborations fail.

And the #1 reason for those failures is a lack of trust.

Issues with trust in your supply chain are generally a result of not establishing clear expectations for your suppliers. When you use metrics to track your vendors, you create a fact-based foundation for building relationships that last. 

Because you’re tracking measurable metrics, there is no room for interpretation or deception. Everything is quantifiable and out in the open. You can share your suppliers’ performance with them alongside your expectations. That gives them specific goals toward which they can work. 

Furthermore, you can use supplier performance metrics for assessing overall supply chain performance and identifying weaknesses.

Finally, supplier performance metrics give you an objective measure for comparing competitive suppliers so you can create wiser partnerships moving forward.

This kind of comprehensive understanding of your supply chain’s strengths and weaknesses will help you deliver:

• Better quality products
• Supply chain efficiency
• Customer trust through transparency

What Metrics Should You Use to Analyze Supplier Performance?

What you need to track will depend on your suppliers, industry, and workflow. Here are some of the common supplier performance metrics you can track in almost any industry:

• Quality: What is the defect rate? How do your vendors perform on internal inspections?
• Timeliness: At what rate do your suppliers and factories ship products on time?
• Completeness: Are you being invoiced for 100% of what you ordered?
• Accuracy: Are your suppliers shipping you everything that is on the invoice?
• Productivity: Are your suppliers meeting yield or output/efficiency goals?

Some additional metrics you could track include:

• Regulatory compliance results
• Production lead time vs. estimated lead time
• ASN accuracy (for shipments)
• Invoicing accuracy (ordered price versus invoiced price)
• Outcome-based metrics (sales rate, rate of customer returns)

A metric could be anything that is measurable, including social responsibility, sustainability, and innovation.

One of the fastest-growing concerns among customers is the story behind the product, specifically, whether or not it was sourced and produced in an ethical manner. Supply chain transparency is your company’s best measure for garnering trust among your clientele.

Fortunately, ethical auditing data can be made available just as concretely as quality performance metrics with the right supply chain management software.  

How Can You Capture Better Supplier Metrics With QIMAone?

Keeping an eye on your entire supply chain is a monumental task. Online quality management software can simplify the process for you.

QIMAone is a smart and collaborative platform that helps brands and retailers improve their products and empower their suppliers with reliable data, real-time visibility, and standardized workflows.

With QIMAone, data is organized in easy-to-understand statistics, such as defect rates within a production batch and overall compliance-failure percentages per factory. 

Plus, you will be able to communicate with your suppliers in real-time to address issues, resolve problems quickly, and keep your supply chain running smoothly.

Finally, our inspection app makes quality and compliance checks easy for inspectors reliant on mobile phones and other handheld devices. 

Capturing actionable supplier performance metrics has never been so easy!

Want to see how it works?

Learn more here or schedule a demo