What are Supplier Management KPIs?

Published March 10, 2020 • < 1 min read

Key Performance Indicators (KPI) are how organizations measure success. Supplier Management ensures that value is received from the money that is spent with suppliers and vendors while focusing on cost savings. When evaluating your organization’s supply chain, there are several key KPIs to review including the following: 

  1. Lifecycle Management – onboarding, change management, and offboarding.
  2. Supply Chain Management – Implement internal policies that govern suppliers and supplier performance.
  3. Performance Measurement – Goods and services received are what was agreed upon, proper time delivery, and purchase orders line up.
  4. Logging and records with alerting for supplier management.
  5. Contract Management – Legal agreements and contracts with suppliers are agreed upon.
  6. Relationship management with suppliers and vendors.

Supplier Management is often difficult because of the sheer number of vendors and suppliers with which an organization conducts business. KPIs will help drive effective and efficient supplier management by setting targets and establishing lead times. When an organization has a target to work towards, good things can happen. There are security implications to supplier management via areas like lifecycle management, especially when it comes to offboarding a vendor. The news is littered with organizations that have paid invoices for resources that never arrived simply because the vendor was no longer a supplier and was doing something malicious.  Therefore, it’s in your organization’s best interest to set up and track supplier management KPIs.

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