Supplier and Relationship Management
This domain covers supplier qualification, outreach, performance management, development, risk, communication, and ethical treatment across the contract life cycle.
Core practices
- Qualify suppliers for responsibility: capability, capacity, financial health, compliance, and past performance.
- Use supplier outreach and diversity programs consistent with policy and law.
- Set expectations at kickoff: KPIs, reporting, escalation paths, and communication norms.
- Use scorecards with objective measures such as on-time delivery, defect rate, and responsiveness; share results with suppliers.
- Manage risk such as financial distress, single-source dependency, cybersecurity exposure, and supply-chain disruption.
- Address poor performance with data, a corrective action plan, and escalation before termination.
Worked example
A supplier misses the 95% on-time delivery target two months in a row. Instead of immediate termination, the contract administrator reviews data, meets the supplier, identifies a raw-material shortage, and issues a corrective action plan with 60-day milestones. Termination remains an option if milestones fail. Reasoning: termination may disrupt service and increase cost; progressive, documented action is more defensible and may preserve the relationship.
Traps that cost marks
- Scorecards based on personality rather than measurable performance.
- Treating high-risk and low-risk suppliers identically.
- Failing to document debriefs, performance meetings, or corrective actions.
- Ignoring supplier financial warning signs.
- Using outreach goals in a way that conflicts with fair competition or policy.