Supplier Evaluation & Performance Management Flashcards
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Read the first 7 Supplier Evaluation & Performance Management flashcards as text
A Corrective Action Plan (CAP) in supplier management is typically initiated when:
Answer: A supplier consistently fails to meet established performance standards
A CAP is initiated when a supplier repeatedly fails to meet performance standards, requiring formal identification of root causes and implementation of specific improvements within defined timeframes.
Which supplier evaluation method provides the most direct verification of a supplier's actual operational capabilities?
Answer: On-site facility audit
An on-site facility audit provides direct observation of a supplier's facilities, equipment, workforce, and processes, offering the most reliable and unfiltered assessment of actual capabilities.
In quality management, PPM stands for:
Answer: Parts Per Million
PPM (Parts Per Million) expresses defect rates as the number of defective units per million produced, enabling standardized quality comparison across suppliers and industries.
When a company relies on a single supplier for a critical component, the primary risk is:
Answer: Increased supply chain vulnerability if that supplier experiences disruption
Single-source dependency creates significant supply chain vulnerability because any supplier disruption—financial, operational, or disaster-related—can halt the buyer's own production or operations.
Benchmarking in supplier evaluation is used primarily to:
Answer: Compare a supplier's performance against industry standards or best-in-class performers
Benchmarking compares a supplier's actual performance metrics against industry standards or best-in-class performers to identify performance gaps and set meaningful improvement targets.
'Supplier rationalization' refers to the strategic process of:
Answer: Reducing the supply base to a smaller number of preferred suppliers for improved efficiency and leverage
Supplier rationalization consolidates the supply base to fewer, higher-quality suppliers, increasing volume leverage, reducing administrative complexity, and enabling deeper strategic partnerships.
A spider chart (radar chart) is used in supplier performance management to:
Answer: Visualize a supplier's performance across multiple dimensions simultaneously
A spider (radar) chart displays a supplier's scores across multiple performance dimensions—quality, delivery, service, cost—on a single visual, making strengths and weaknesses immediately apparent.