Mid-Year Resolution:
From Data to Action — Evaluating Supplier Performance the Smart Way
Mid year is a great time to evaluate suppliers (KPIs). With one cycle of feedback already completed, it’s important for your team to step back and see what is working and what needs more attention, which suppliers are performing well, and who is falling behind.
Effective supplier management is key to maintaining a reliable and efficient supply chain. A Supplier Relationship Management (SRM) system allows businesses to track and optimize supplier performance and make sure your supplier are on track.
Hopefully, your team uses an automated SRM like LUPR to automate supplier evaluations using real-time data. These scorecards aid decision-making, renewal considerations, and high-risk supplier identification. They consolidate supplier metrics into a single view, simplifying performance comparison over time. For instance, one of our chemical Fortune 500 customer now rates over 100 suppliers annually, up from 15, and another leverages a Dynamic Approved Supplier List in strategic categories to better match suppliers to complex needs.
1. Define Key Performance Indicators (KPIs)
The first step is establishing measurable criteria to assess suppliers. Common KPIs include:
- Quality: Percentage of defects or returns – integration with other systems.
- On-Time Delivery: Adherence to deadlines.
- Cost Competitiveness: Price consistency and cost savings.
- Compliance: Adherence to regulatory and contract requirements.
- Innovation & Collaboration: Supplier’s ability to adapt and add value.
LUPR has a KPI Library with predefined criteria, allowing you to Create KPIs or customize additional KPIs for your business based on your needs.
LUPR - Out of the box KPI Library
2. Automate Stakeholder Feedback
Supplier performance isn’t just about numbers. You should have a system in place to collect feedback from internal teams who interact with suppliers, such as Procurement, Logistics, and Finance. This qualitative data, along with quantitative data coming from other systems, helps identify service issues that may not be reflected in metrics alone. The SRM calculates a score for each supplier based on data you select. LUPR customers use scores to rate their suppliers which appear alongside financial measures on a fully dynamic Approved Supplier List (ASL). Mid year is the best time to do a first round of regular reviews and decide on necessary strategic decisions based on evolving business requirements and scorecarded results.
3. Conduct Regular Reviews & Audits
Regular performance reviews are essential for ensuring your suppliers meet agreed-upon expectations and for fostering long-term collaboration. These reviews should be:
- Scheduled consistently (quarterly, bi-annually, or annually depending on supplier criticality)
- Based on objective data gathered from your SRM system, such as delivery timelines, quality scores, compliance ratings, and innovation contribution.
- Supported by visual dashboards from tools like LUPR to clearly highlight:
○ What’s working well (on-time delivery, quality improvement)
○ Areas of concern (late shipments, cost variances, service gaps)
○ Trends over time (improving or declining performance)
During these meetings, plan to involve both procurement and key stakeholders (e.g., operations, quality, finance) to create a shared view. Transparency in discussing gaps and goals builds trust and helps suppliers understand your business priorities—encouraging proactive improvement and innovation.
4. Use Data to Drive Continuous Improvement
A robust SRM platform like LUPR doesn’t just store supplier data—it turns it into strategic insight.
Here’s how to use it effectively:
- Set improvement plans: Define specific, measurable goals based on current performance gaps (e.g., reduce defect rate by 10% in 6 months).
Monitor progress in real-time: Use dashboards and alerts to track whether KPIs are trending in the right direction.
Collaborate directly in the platform: Assign corrective actions, schedule follow-ups, and maintain a record of communications and adjustments.
Benchmark across suppliers: Identify top performers and share best practices across your supply base.
Drive cost optimization and risk reduction: With better visibility into performance trends and root causes, you can take proactive steps—like supplier development, contract renegotiation, or even supplier consolidation.
Ultimately, these steps shift your SRM process from reactive issue management to proactive performance leadership, creating stronger partnerships and delivering greater value across the supplier lifecycle.
Final Thoughts
Evaluating supplier performance through clear KPIs is not just a measurement exercise—it’s a strategic enabler. By conducting regular, data-driven reviews and fostering open dialogue, organizations can transform supplier relationships into partnerships rooted in accountability and continuous improvement. Leveraging a robust SRM platform like LUPR empowers procurement teams to move beyond reactive management toward proactive optimization—driving efficiency, reducing risk, and unlocking long-term value across the supply base. In today’s dynamic environment, those who operationalize supplier performance as a strategic process will be best positioned to lead.