Supplier performance management
This solution provides effective ways to measure the performance of suppliers that can help improve collaboration and can lead to better coordination between the buyers and suppliers
Challenge
Buyers need to evaluate and monitor the performance of their strategic suppliers, but currently, our product is not providing key supplier performance information, as a result, they are forced to use other sub-optimal tools and feeling frustrated. Supplier performance is also an integral part of our product suites and SAP is losing critical deals and the sales team is having a hard time closing new deals.
Ricky
Supplier relationship manager
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Strengthen relationship with our suppliers by continuously improving them
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Identify which suppliers can add value and be a long term partner with us
Allina
Commodity manager
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Vetting suppliers that can meet our business requirements
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Resolve issues with supplier performance
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Monitor their performance and ensure the business continuity
User goals
As a Supplier relationship manager, I want to make sure our strategic suppliers are performing well on the different evaluation criteria (quality, delivery time, cost, quantity), so I can develop them to meet our business needs.
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As a Category manager, my goal is to make sure I have solid sources of supply for my categories and to mitigate any operational risks (or potential disruptions to the supply chain) by taking proactive measures such as monitoring and evaluating my suppliers’ performance.
Business impact
To become the leading supplier performance management solution in the market for direct and indirect suppliers by building a platform that provides full transparency into supplier's strengths and weaknesses enabling real-time decision-making across the procurement landscape, we needed to act fast on strategically placing this solution into our new platform.
Key expected outcomes
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Increased adoption
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Increased renewals​
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Increased NPS
Success measures
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Number of signups
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Number of renews
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Number of performance evaluations created
Our vision
I worked with the product managers and leaders to put together the vision of this product and planned on how we could move towards the vision incrementally developing each building block.​
Design thinking
Discovery research - Understanding the current journey and pain points
My core team and I ran eight workshops to gain deep empathy with customers and their end-users. Then, I mapped out several different scenarios that the customers shared with us and identified the pain points. Then, as a team, we prioritized the problems and shared them with the customers for further validation. ​
Scenario mapping
Key takeaways
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Trusting the suppliers to provide their accurate performance information is not always the right way.
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Not having visibility into the supplier’s real-time operational data is an issue for many Supplier Managers.
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Analyzing available information to draw conclusions about what might have caused the performance issues can be time-consuming sometimes.
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At a more mature organization, the suppliers that are in the supplier relationship management (SRM) are defined/identified by the commodity managers at the time of category planning at the beginning of each year.
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The goal of the organization could sometimes drive which KPIs are important to track. Ex: If the organizational goal is to be 100% carbon-free by the end of 2022, then sustainability should be added as a KPI to be tracked.
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Buyers also take feedback from other stakeholders to review the supplier's performance to get a holistic view
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They wanted to see the industry benchmarks for each of those performances to help them standardize what's acceptable.
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Selecting the right key performance indicators (KPIs) is very challenging because choosing the wrong KPI can cause extra costs and have a bad impact on the business.
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Taking action on a supplier that deviated from the target set for them is very time-consuming. The actions could sometimes mean that the contract needs to be renegotiated and amended with some new clauses.
Validating assumptions
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Performance is evaluated on multiple suppliers supplying the same commodity:
We assumed Supplier managers evaluate one supplier at a time by tracking a set of performance indicators for each supplier. But, after speaking with several customers this hypothesis turned out to be not true. Customers mentioned they want to be able to compare the multiple suppliers on a set of standardized performance indicators for easier evaluation.​
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Supplier relationship managers review the suppliers that are strategic to their business:
We also assumed that Supplier managers might want to view an overview of all the suppliers of their organizations and then identify which ones they need to pay close attention to. But, after discovery research, it was clear that it depends on the size and maturity of the organization. Larger organizations with thousands of suppliers distribute the management responsibilities either by specific commodity or region. They would put the strategic suppliers (also referred to as hi-touch suppliers) into that supplier relationship management bucket. Some of the criteria that helps with prioritization are spend, risk, criticality of the commodity, newness of the supplier to the business, recent incidents and so on.
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They need to identify which suppliers to monitor regularly:
Customers we spoke with mentioned it is a pain to identify which suppliers need to be closely monitored and which is not. They by default would like to prioritize the suppliers with the highest spend or business criticality. So, we needed to pivot our direction to show the users some historical data to help them prioritize.
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They gather feedback from stakeholders to analyze:
The initial assumption of the team was that we would collect all performance information through questionnaires sent to respective departments (Financial, operational, logistics, and so on), but this was not solving their issue of entering the information manually each time for their suppliers. So, we decided to integrate with their existing systems (S/4HANA, SAP ERP ) to get the operational data in real-time and use questionnaires to gather additional experience data.
Based on these research findings, I quickly created some design concepts to further test them out.
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Idea generation
After we had a clear understanding of the user problems and their process, I gathered the team to ideate many solution ideas that we wanted to create lo-fi mockups to visualize the end-to-end solution. We generated a point view to help us start ideating in that direction.
Point Of View:
Supplier managers need to improve and maintain their relationship with critical suppliers because finding new replacements could cost time and money. They need to make sure that they are not only performing well from an operational standpoint, such as, on-time delivery, quality, cost, quantity deviations, etc., but also providing value by going above and beyond to help them succeed in their business. They need to make their decisions by analyzing both operational and experience data (O + X data).
Exploration
Workflow
Overview page design iterations
Usability test
After generating concepts and bringing alignment within our team, I conducted usability research with 8 participants who represented our target user group to further gather feedback on the design direction. Created affinity mapping with the findings and presented them to the team.
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6/8 participants mentioned the Performance indicators (On-time delivery, quality, cost) need to be there in the contract as well for them to hold the suppliers accountable.
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Showing users an overview of their suppliers can be useful for them to draw their attention to the problem areas.
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All the participants wanted to see the spend amount of the suppliers and risk information to determine whether they need to worry about them or not.
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They all expected to see the performance scores of the suppliers on different performance indicators without having to submit for an evaluation.
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Some participants who belonged to less mature organizations wanted to see the exact incidents that caused the performance scores to deteriorate, but on the other hand users from more mature organizations wanted to see the high-level scores only.
After identifying the core capabilities we wanted to build first through many validations and customer feedback sessions I brought the whole team together and mapped out the stories that we focused on for the round 1 development. We decided to integrate with the customers' current Enterprise Resource Platforms (ERPs) as well as SAP's S4/HANA, which gave us the operational performance indicator information (On time delivery, quality, cost, defects with delivery etc.) to present on the dashboard. This way, our users can view and interpret the existing data first and then decide whether to create a performance program for their low performing suppliers to further capture more qualitative data using surveys to enhance their performance.​
Defining steel thread
Final deliverables
The research findings helped us get to our "Steel thread" (as I would like to call it minimum desirable product). I started working closely with the developers to analyze the new framework (SAP's UI5, Fiori design system) we were going to adopt for this. Eventuality the vision was to migrate all the legacy products using old technology to SAP's new Business Technology Platform (BTP). Using the available design system UI components I refined the end-to-end experience and created the hi-fi prototype.
Overview page
Overview (first time user)
An overview of the suppliers to help users visualize and prioritize the suppliers to monitor closely or create a performance to program to improve them.
Performance programs
All performance evaluation programs that users can track the progress of and take actions on.
Performance program creation
Using this program creation wizard users can select the specific dimensions that the performance can be evaluated on. Ex: Commodity, region, plant etc.
Performance program results
After the evaluation program completes on cycle the results in the form of performance scores can be viewed to compare between the suppliers. Users can view trend and compare strength and weaknesses of the suppliers.
Survey insights
Using Qualtrics API we will provide the users with insights from their survey responses. This could help the Supplier managers deep dive into the feedback that the evaluators have provided about the suppliers.
Supplier's performance view
Performance of a specific supplier can be further analyzed and acted on.
Prototype
Next steps
This is being built incrementally, going through multiple phases of development. I am working closely with the developers to support and guide them through the UI development process by providing them with detailed specifications and screens for each usecases. We are now at the end of the phase 1 milestone, with developers wrapping up the development of the first increment of this solution. The next increment of this solution will include some of the following capabilities to enhance the experience even further.
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Make the performance data available at the time of strategic sourcing to help buyers make an informed decision on which supplier to select and award.
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Help guide the supplier managers through suggestive actions from available performance trends.
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Bring in other supplier management phases (Risk evaluation, qualification, onboarding of suppliers) from the legacy Ariba applications to the new SAP technology platform (BTP) to complete the end-to-end process.