Procurement Case Study
– Supplier Management Solution

Rail transport supplier performance management case study.

BACKGROUND

The client was a national transportation & logistics provider, with over 600 trucks & 12 warehouses across Australia. Where necessary, the client supplemented its internal fleet with the use of interstate rail services to support transport of goods. The relationship with the rail service provider was critical to the clients value proposition & overall performance to customers.

However performance had been mixed & numerous management meetings had not delivered improvement. The client also had future strategic plans it wished to discuss with the supplier, however was not confident that they were sufficiently aligned to discuss those plans.

PROJECT OVERVIEW

Spend Solutions procurement company were engaged to develop & deliver a supplier performance management solution that would seek to align strategic needs & deliver a sustained performance improvement. With the existing agreement due to expire, the timing was perfect to reset expectations & negotiate a performance based agreement that established performance targets, measured ongoing performance & established mechanisms for missed targets.

Once implemented, an ongoing business review structure was established that monitored & assessed performance against agreed KPI’s, with improvement plans agreed upon & implemented to drive ongoing performance improvement.

PROJECT OUTCOMES

The performance based agreement established clear performance targets & measurement so both parties were aligned on the performance expectations & review mechanisms. Ongoing dialogue with the supplier through regular, formalised business reviews maintained focus to achieving ongoing performance improvement & provided both parties with sufficient incentive to plan & deliver the required actions.

The combination of a performance based agreement & ongoing business reviews lifted supplier performance so that within 3 months they were achieving 80% of KPI targets, with greatly improved customer service & operational performance levels. This in turn lifted the overall performance of the client to its customers & enhanced the reputation of the client as a trusted partner.

Procurement Services Case Study- Supplier Management Solution