What is the main focus of supplier performance management?

The main focus of supplier performance management is the regular evaluation and monitoring of supplier capabilities. This process is essential because it helps organizations to assess how well suppliers meet their contractual obligations, adhere to quality standards, deliver timely, and align with the overall strategic goals of the organization. By continuously tracking and measuring supplier performance, businesses can identify any issues or areas for improvement, foster stronger relationships, and enhance collaborative efforts. This proactive approach also allows organizations to make informed decisions regarding supplier retention, development, or replacement, ultimately leading to better supplier relationships and enhanced overall supply chain performance.

The other options, while related to supplier management strategies, do not encapsulate the core focus of performance management as effectively. Increasing product pricing does not fundamentally relate to ongoing supplier assessment, creating contracts does not inherently ensure that supplier performance aligns with expectations, and reducing the number of suppliers is more of a tactical decision rather than a focus on performance evaluation.