What do performance indicators measure in supplier management?

Performance indicators in supplier management are essential tools used to evaluate the effectiveness and efficiency of a supplier’s operations. They provide quantifiable measures aimed at assessing various aspects of a supplier’s performance, such as quality, delivery reliability, cost competitiveness, and overall customer service.

When focusing on metrics for evaluating supplier performance, these indicators can address how well a supplier meets contractual obligations, the quality of their goods or services, their ability to fulfill orders on time, and their responsiveness to issues. By utilizing these specific metrics, organizations can make informed decisions regarding supplier selection, ongoing management, and potential development or termination of supplier relationships. This ultimately supports strategic goals and contributes to improved supply chain performance.

While other options may address relevant aspects of supply chain management, they do not directly pertain to the primary purpose of performance indicators, which is to measure and evaluate supplier performance specifically.