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Vendor Performance Management. Breakout Session 203 Jon Maxim, President, Maxelerate April 10, 2006 2:45 PM. Competitive Environment. Preparation. Management. Negotiation. The 4 Phases. Control Unmanageable Vendor. Direct Long-Term Relationship. Optimize Vendor Performance.

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Presentation Transcript
slide2

Vendor Performance Management

Breakout Session 203

Jon Maxim, President, Maxelerate

April 10, 2006

2:45 PM

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

the 4 phases

Competitive Environment

Preparation

Management

Negotiation

The 4 Phases

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

the vpm process

Control Unmanageable Vendor

Direct Long-Term Relationship

Optimize Vendor Performance

Manage The Contract

Management

The VPM Process

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

slide5

Control

Unmanageable

Vendor

Direct

Long Term

Relationship

Optimize Vendor Performance

The VPM Journey

Manage The Contract

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

slide6

Manage The Contract

  • Manage the “Paper Trail”
  • Manage the money
  • Manage your assets
  • Manage changes

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

manage the contract
Manage The Contract

Administer Contract

  • Manage the “Paper Trail”
    • Contract content and event tracking
      • Deliverables
      • Service level agreements
      • Events: Renewals, termination, price, etc.
    • Vendor interaction documentation

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

manage the contract1
Manage The Contract

Administer Contract

  • Manage the money
    • End-to end payment administration
    • Remedy and reimbursement entitlement

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

manage the contract2
Manage The Contract

Administer Contract

  • Manage your assets
    • What is an asset?
    • Physical Assets
    • Intellectual Property
      • Yours
      • Theirs
    • NDA’s and Proprietary Information

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

manage the contract3
Manage The Contract

Administer Contract

  • Manage changes
    • Inevitability
    • Vendor vs. client view
    • Incorporate rolling estoppels
    • Change process
      • Focal point
      • Response format
      • Timely disposition

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

slide11

Optimize Vendor Performance

  • Track & Measure
  • Compare
  • Act!
  • Incent

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance
Optimize Vendor Performance

Enforce Compliance

  • Track
    • Customer responsibilities
    • Vendor responsibilities

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance1
Optimize Vendor Performance

Enforce Compliance

  • Measure
    • Aligned with contract
      • SLA’s
      • Methodology
    • Problem prevention

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance2
Optimize Vendor Performance

Enforce Compliance

  • Compare
    • Vendors within categories
    • Executive communication

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance3
Optimize Vendor Performance

Enforce Compliance

  • Act!
    • Feed Back Performance
    • Obtain Remedies
    • Vendor management automation tools

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance4
Optimize Vendor Performance

Vendor Tiers

  • Why tier?
  • Criteria
  • Expectations

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance5

Strategic

Preferred

Standard

Optimize Vendor Performance

Tier III

Tier II

Tier I

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance6
Optimize Vendor Performance

Incentives Management

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance7
Optimize Vendor Performance

Incentives Management

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance8
Optimize Vendor Performance

Incentives Management

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

optimize vendor performance9
Optimize Vendor Performance

Incentives Management

  • Rights, remedies & rewards
    • The limitations of remedies
    • Use of incentives and rewards
    • Optimum performance vs. overpaying

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

slide22

Direct Long Term Relationship

  • Establish Correct Relationship
  • The True Strategic Supplier

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

direct long term relationship
Direct Long-Term Relationship

The True Strategic Supplier

What a strategic supplier brings to the “relationship table”:

  • Engages you in joint development
  • Their senior execs are assigned to you
  • Account teams have high knowledge level
  • Accountable for product performance
  • Leader in their industry
  • Committed to continuous improvement
  • Expectations custom built to your company
  • Create competitive advantage for you
  • Provides preferential pricing

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

slide24

Control Unmanageable Vendor

  • Love
  • Leverage
  • Conflict Resolution
  • Termination

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

control unmanageable vendor
Control Unmanageable Vendor

Sources Of Leverage

  • The Contract
  • The Marketplace
  • The Relationship
  • The Law
  • Your Checkbook

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

control unmanageable vendor1
Control Unmanageable Vendor

Termination Project Plan

  • Assign project manager
  • Form transfer team
  • Develop termination strategy
  • Gain executive sponsor approval
  • Select replacement supplier
  • Develop transition plan
  • Ramp up new supplier
  • De-ramp current supplier
  • Deplete inventories
  • Clear invoices
  • Inform clients
  • Communicate with current suppliers
  • Communicate with stakeholders and business units
  • Terminate supplier transactions

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

5 keys to success
5 Keys To Success
  • Executive support
  • Teaming stakeholders
  • Classification of suppliers
  • Measurement
  • Rules of engagement

NCMA World Congress 2006

:

Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management

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