Measuring Supplier Performance & Gaining Transparency - KBC
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Real-World Example

Measuring Supplier Performance & Gaining Transparency

Our efficient and clearly structured approach enables a sustainable improvement in the quality of purchased parts.

Background

The steadily increasing outsourcing of production volumes, along with the ongoing expansion of product lines driven by more specific customer requirements, is making supply chains ever longer and supplier network management increasingly complex. Caught between the competing priorities of cost, quality, innovation, and flexibility, procurement is increasingly expected to act as a value driver rather than merely a facilitator. In innovative procurement organizations, quality in particular is more than ever the focus of top management. Accordingly, figures, data, and facts are essential components for sustainably unlocking potential through the lever of “transparency in the supplier network.”

Specific Task Description

  • On behalf of the Executive Board, ensure transparency regarding quality issues and resolve inherent quality issues with purchased parts
  • Establishing Transparency Regarding Quality Performance in the Supplier Network (Evaluation Methodology, Prioritization, and Planning)

KBC Approach

A key requirement for successful procurement is consistent transparency regarding supplier performance. We enabled our client to identify supplier issues through the procurement function and, as a result, pinpoint reliable suppliers. To achieve this, we focused our project activities directly at the interface between the supplier network and the procurement function. We designed and piloted a supplier evaluation framework that was ultimately applied during supplier audits. Furthermore, we managed supplier review meetings and enhanced them with new, relevant information and analyses. Finally, we assessed the long-term impact of supplier initiatives using a portfolio of quality metrics.

Portrait photo of Larissa Fahrmeier, Director at Kemény Boehme Consultants (KBC). A woman with shoulder-length, dark brown curly hair smiles broadly at the camera. She is wearing an elegant white chiffon blouse with black ruffles and a button placket over dark blue dress pants, as well as a delicate silver necklace and a silver wristwatch; both hands are confidently placed on her hips, and she has an energetic and open posture.
Portrait photo of Larissa Fahrmeier, Director at Kemény Boehme Consultants (KBC). A woman with shoulder-length, dark brown curly hair smiles broadly at the camera. She is wearing an elegant white chiffon blouse with black ruffles and a button placket over dark blue dress pants, as well as a delicate silver necklace and a silver wristwatch; both hands are confidently placed on her hips, and she has an energetic and open posture.
Larissa Fahrmeier
Director

Impact Achieved

The KBC team successfully carried out the assignment given by the Executive Board. In total, the team managed and monitored approximately 1,100 supplier locations through 7,000 actions, including data preparation for 14 supplier review meetings.

In addition, we have implemented a methodology framework for supplier evaluation (~800 questions), which is currently used by all quality managers responsible for suppliers in the purchasing department. The Executive Board confirmed the business benefit of ~102 million euros.