7 Supplier Performance KPI's

You Should Measure

1. Commercial & Price
Performance

Unit Price: of an item development over time

Price Competitiveness: Price increase by the

supplier compared with sectoral average.

Price Compliance: Price increase within the

agreement.

Total Cost: Costs of transportation, inventory,

administration, customs, risk & damage, handling
and packaging, cost of supplier non-conformance,
customer returns.

Payment Terms: agreed to.

Proven Cost Reductions: Corrective actions &

technological investments made by the supplier
and reflected upon in its pricing.
2. Quality Performance

Quality Performance: Percentage of defects, such

as PPM.

Customer Complaints/Warranty Claims: Number

of complaints/warranty claims; percentage of
total number of orders.

Solutions to Quality Problems: Supplier’s

ability/speed to solve quality problems detected
by the company.

Customer Service & Complaints Response Time

Quantity Reliability: The supplier’s compliance

with the predetermined order quantity.
 3. Supply Chain &
Delivery Performance

Speed

Order Lead Time

Due Date Reliability: The supplier’s compliance

with the predetermined order due date.

Packaging Standards Reliability: The supplier's

compliance with the packagin standards.

Adherence With Other Delivery Requirements:

Milestones, costs, delivery dates.
 4. Flexibility

Product Volume Change: The ability and

willingness and cost for a supplier to change order
volumes.

Product Mix Change: The ability, willingness and

cost for a supplier to change the mix of ordered
items.

Modification Flexibility: Ability of the supplier to

design new products or make design changes in
existing products.

Expediting: The ability, willingness and cost for a

supplier to expedite a rush order.

Disruption Response: Time taken to respond to

unexpected disruptions in
market/upstream/downstream.

Disruption recovery: Time taken to recover to

normal operations from unexpected disruptions.
 5. Collaboration
Willingness to Act if Deviations: Does the supplier
act if something is deviating from what's been
agreed upon.

Speed of Responsiveness: Does the supplier get

back within x number of hours/days/weeks.

Quality of Communication: Does the supplier

communicate in a clear, concise and accurate
manner.
 6. Innovation
Innovation Focus: Percentage of investment spent
by the supplier in R&D.

Innovation Speed: The amount of time it takes the

supplier to develop a new part.

Proven New Product Design Capabilities: The

ability of the supplier to design new products or
make changes in existing products.

Proven Technological Capabilities: The level of

technological capabilities the supplier possesses
and is willing to use for your products.

Proven Knowledge Sharing: Willingness of the

supplier to share information related to
R&D/innovation/technological information.
 7. Sustainability
Performance
Environmental Sustainability:
1. Climate impact & emission progress.
2. Water usage development.
3. Energy use development.
4. Proven willingness to move towards utilizing
materials with less environmental impact.

Social Sustainability:
1. Incident development.
2. Accident development.
3. Turnover of employees over time.
4. Sick-leave number over time.