Supplier performance management based on benchmarking methodology

Abstract

Supplier performance can directly affect the quality of manufactures' supply chain. An efficient management mechanism should be established to enhance and improve supplier performance. Benchmarking management can clearly lead suppliers to find their weakness and the approach to develop their performance, therefore it can serves as the basement of the supplier performance mechanism. Based on benchmarking methodology, this paper establishes a conceptual model for supplier performance management. By setting benchmark for suppliers in different level and encourage suppliers to compare with the benchmark, enterprise can control and optimize the performance of suppliers. This model also emphasizes the dynamic evaluation of continuous improvement of suppliers' performance and highlights the necessary of enterprise's incentive actions.