Remember If you can’t measure it………. You can’t control it
Managing Supplier Performance Vendor rating vs. Vendor Evaluation before you buy Rating after. Provides objective information Provide the supplier with an indication of their performance Involve suppliers in design of assessment techniques.
'The Ten C's of Effective Supplier Evaluation': 1. Competence of the supplier to undertake the tasks required. 2. Capacity of the supplier to meet the purchaser's total needs. 3. Commitment of the supplier to the customer in terms of quality, cost driving and service. 4. Control systems in respect of inventory, costs, budgets, people and information. 5. Cash resources and financial stability. 6. Cost, commensurate with quality and service. 7. Consistency, the ability of the supplier to deliver consistently. 8. Culture, the supplier and purchaser share similar values. 9. Clean, should satisfy environmental requirements. 10. Communication, the supplier communicates efficiently.
Key Performance Indicators
Managing Buyer Performance is affected by both the supplier's and the buyer's actions. Traditionally relationships have been adversarial and reactive. More recent thinking promotes proactive and mutual relationships.
Pharmacy Supply Chain Development Matrix ELEMENTARY – Stage 1 - Manual environment - Paper based data capture - Poor systems functionality - Lack of quality Management Information - Labour intensive - Diverse storage, lacks uniformity, no bar coding - High processing costs - Routine contacts with Wholesalers - Potentially high stock investment - Poor resource scheduling/planning - Low efficiency, poor service levels ESTABLISHED – Stage 3 - Automated environment - Leveraging systems functionality - Robust/accessible Management Information - Established reporting methods - Efficient storage layouts & bar code maintenance within departments - Pro-active maintenance of stock levels/parameters - Low stock investment - Partnership with wholesalers - Greater efficiency, consistent service levels - Effectively using PDA existing functionality DEVELOPING – Stage 2 - Mixed systems environment - Developing systems functionality - Some electronic scanning used - Reducing processing costs & productivity improvements - Less labour intensive - Developing relationship with wholesalers - Storage layouts and bar coding in selected departments - Improving quality of Management Information - Lower stock investment - Improving efficiency and service levels - Outputs used for resource planning & scheduling - Stock levels planned for selected commodities/departments SOPHISTICATED- Stage 4 - Fully automated environment incl. demand capture - Fully leverage systems functionality - Continual refinement & development of management reports - Highly efficient storage layouts/planning & bar coding maintenance - Low processing costs - Optimised stock investment - Fully leveraged partnership with wholesalers - High levels of efficiency, optimised service levels - High visibility of information & forecasting ability - Predictive analysis where required - Provides the platform for future PDA functionality developments
Characteristics Improvement opportunities-next stage Benefits Stage 1 Lack of quality mgt information Manual environment Labour intensive High processing costs & stock investment Low efficiency Diverse storage/layouts Poor resource scheduling/planning Emerging JD’s/training Identify some ‘quick wins’ Develop clinical staff awareness, basic schedules & resource mgt Engage with wholesalers Identify performance measures & initial training needs Implement bar code scanning & stock level parameters Early successes for the programme Improved service levels & planning Releases clinical/admin time Reduced processing & obsolescence costs Significant stock/space reduction Once off cash release Stage 2 Improving quality of mgt info Some electronic scanning Less labour intensive Reducing processing costs Lower stock investment Productivity improvements Outputs used for planning purposes Some stock management Develop scanning at point of data capture Improved usage of mgt reports Refine storage layout in depts Establish performance mgt, stock classifications & policy Develop wholesaler joint service improvement programme Implement regular service reviews Further releases clinical/admin time Consistent service levels Reduced processing & obsolescence costs Further stock/space reductions Once off cash release Pro-active planning Improved service levels Stage 3 Robust/accessible mgt info Fully automated environment Low processing costs & stock investment Effective resource planning Efficient storage layout/bar coding Predictive forecasting, stock levels & resources Continue to develop wholesaler relationship Refine performance measures Regular, robust service reviews Establish regular stock classification reviews & service levels of managed service Develop fully automated scanning regime Effective use of available systems Refinement of service levels Further releases clinical/admin time Reduced processing costs Additional stock/space reductions Professional/trained work force Consistent service levels Stage 4 Refinement of mgt reports Sophisticated forecasting/predictive tools Highly efficient storage Fully automated environment Ongoing review of JD’s & training Optimised stock investment High efficiency Deliver ongoing improvements through exploitation of technology/functionality Implement full performance measurement & mgt incl. SLA’s Ongoing mgt of wholesaler partnership Identify additional functionality enhancements Efficient supply chain mgt & resource deployment Optimised service levels Delivers ongoing efficiencies Agile/responsive supply chain Ongoing modelling across the supply chain Continue to optimise through the use of technology
Benchmarking 'A benchmark is a fixed point of reference against which measurements and comparisons can be made. ‘ The Seven stages of benchmarking. 1. 2. 3. 4. 5. 6. 7. Decide what aspects of operations to benchmark Plan the benchmarking project Create a baseline for benchmarking comparisons Decide whom to benchmark against Decide how the information required will be collected Analyse the information obtained Use the findings Activity WHAT COULD WE BENCHMARK WITH EACH OTHER? See CIPS topic reference file - Benchmarking
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