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Why Your Suppliers Could Be the Reason Your Business is Struggling (And How to Fix It)
Most businesses wake up one day and realize something's off.
Suppliers are causing them more headaches than they expected.
They followed the usual advice:
Choose the cheapest option
Go for the quickest solution
Stick with the "trusted" vendor
But then, the costs start piling up.
Quality begins to slip.
And the bigger picture is falling apart.
This Nigerian proverb sums it up perfectly: "When the roots of a tree begin to decay, it spreads death to the branches."
(It means: Bad supplier performance doesn’t just affect your suppliers; it hurts your entire business)
Don’t wait until it’s too late.
The wake-up call doesn’t have to be months or years from now. It can happen today. Now.
Stop making decisions based on price alone. Stop overlooking supplier performance. Stop settling for mediocrity.
Your business deserves better.
Measuring supplier performance isn’t optional.
It’s essential for growth.
Here’s a foolproof method I use to track vendor performance.
It works. And it's simple.
Let me break it down for you:
1. Simple Criteria
It starts with defining what truly matters.
Instead of overcomplicating things, focus on key areas that impact your business directly.
For example:
If you're in retail and rely on suppliers for timely deliveries, then on-time delivery becomes a non-negotiable
If your supplier is consistently late, your sales will be affected because your products are sitting in a warehouse rather than being stocked on shelves
When you track this consistently, it’s easy to spot when it’s a fluke or a recurring issue
Similarly, quality is another crucial factor.
Take, for example, a manufacturer in the food industry. If suppliers are not meeting food safety standards, the consequences aren’t just a poor product; they could result in recalls, customer complaints, and legal repercussions.
This is why assessing quality (defects, adherence to specifications, and consistency) is critical.
2. Real Metrics that Matter
When measuring performance, metrics should be straightforward and data-driven.
Forget about general and vague ratings like "vendor was good." Track specific metrics such as:
Delivery time: Did the supplier deliver on time? Measure the actual days against the agreed timeline
Defect rates: What percentage of products were returned due to defects? For example, if you're working with a supplier for electronics, even a 5% defect rate could cause significant returns and losses
Customer service responsiveness: How long does it take for your supplier to respond to an issue? If you're dealing with a tech supplier, fast issue resolution is crucial for maintaining operational efficiency. You don’t want to be waiting for days while your customers are frustrated
If you track these:
You’ll see exactly where suppliers are falling short and can have the data to back up any conversations about performance improvements or necessary changes.
3. A Clear Process
Don’t make it difficult.
The method should be:
Clear
Easy to follow
And effective in keeping track of performance
This is where consistency is key. Regular performance reviews improve outcomes
Create a simple process:
Set clear expectations for what constitutes success (e.g., delivery within 3 business days, 98% quality consistency)
Implement an evaluation cycle, whether it’s monthly, quarterly, or bi-annually, ensure this feedback loop is in place to identify areas for improvement
Use a scorecard: Create a simple spreadsheet with the criteria you care about (e.g., quality, on-time delivery, communication) and rate each supplier on a scale. Over time, this builds an easy-to-read, actionable history
By tracking these regularly, you’ll identify patterns and can easily compare vendors.
This allows you to make data-driven decisions when it’s time to renew contracts or even part ways with underperforming suppliers.
Don’t make vendor decisions on guesswork
Key Takeaway
By tracking supplier performance with real metrics, simple criteria, and a clear process, your business will not only be afloat; it will also grow and be protected.
Start implementing this simple method today and stop leaving your business’ future to chance. Your success depends on it.
Over 265 leaders in my newsletter community have already taken control. What’s stopping you?
Join a community of 600+ professionals growing their impact. Get 3-minute tips on achieving better results with insights and performance systems, every Thursday. Simplified, actionable, and easy to Do-it-Yourself.
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