Supplier Management Process
1. Purpose
To establish a structured framework for selecting, engaging, monitoring, and improving
suppliers to ensure the delivery of quality goods and services, manage risks, and foster
collaborative relationships.
2. Scope
This process applies to all external suppliers and vendors providing goods, services, or
resources to [Organization Name], across all departments and projects.
3. Definitions
Term Definition
Supplier An external organization or individual that
provides goods or services to the
organization.
Vendor A supplier of products or services under a
contractual agreement.
SLA Service Level Agreement defining
performance standards and metrics.
RFP Request for Proposal document used to
solicit bids from potential suppliers.
KPIs Key Performance Indicators used to
measure supplier performance.
4. Roles and Responsibilities
Role Responsibility
Procurement Manager Oversee supplier selection, negotiations,
and contract management.
Supplier Relationship Manager Maintain ongoing communication and
manage performance reviews.
Quality Assurance Lead Ensure supplier deliverables meet quality
standards.
Risk Manager Assess and mitigate supplier-related risks.
Project Manager Coordinate supplier activities within
project timelines.
5. Process Overview
5.1 Supplier Identification and Selection
• Identify requirements and specifications
• Develop and issue RFI/RFP documents
• Evaluate bids based on criteria (cost, quality, delivery, sustainability)
• Conduct supplier audits and site visits
• Select and approve preferred suppliers
5.2 Contract Negotiation and Onboarding
• Negotiate terms, SLAs, and pricing
• Finalize contracts and obtain approvals
• Complete onboarding documentation and setup
• Provide training on organizational policies and tools
5.3 Performance Monitoring and Management
• Define KPIs and performance metrics
• Schedule regular performance reviews and scorecards
• Track delivery timelines, quality metrics, and compliance
• Address non-conformances and implement corrective actions
5.4 Relationship Development and Collaboration
• Foster strategic partnerships and continuous improvement initiatives
• Conduct regular business reviews and feedback sessions
• Share forecasts, plans, and innovation opportunities
5.5 Risk Management
• Identify and assess supplier risks (financial, operational, geopolitical)
• Develop mitigation plans and contingency measures
• Maintain risk register and update periodically
5.6 Contract Renewal and Exit Strategy
• Evaluate supplier performance and relevancy
• Negotiate renewal or transition contracts
• Plan and execute exit activities, ensuring knowledge transfer
6. Tools and Templates
• Supplier Evaluation Matrix (Excel)
• RFP/RFQ Templates
• SLA and Contract Templates
• Supplier Performance Scorecards
• Risk Register Template
7. Metrics and Reporting
Metric Description
On-time Delivery Rate Percentage of orders delivered on or before
the agreed date.
Quality Conformance Rate Percentage of deliverables meeting quality
standards.
Supplier Lead Time Average time from order placement to
delivery.
Cost Variance Difference between budgeted and actual
supplier costs.
Risk Incident Frequency Number of risk events per period.
