| name | supplier-management |
| description | Manage supplier relationships through performance scorecards, capacity assessment, risk profiling, contract compliance monitoring, and supplier development plans. TRIGGER when: user says /supplier-management, "manage suppliers", "supplier scorecard", "vendor management", "supplier review", "supplier performance".
|
| argument-hint | [supplier-name] [category] [review-period] |
| user-invocable | true |
Supplier Management
Build resilient, high-performing supplier relationships through structured evaluation, risk management, and continuous development.
Input Gathering
| Input | Description | Required |
|---|
| Supplier master list | Name, category, spend tier, location, contact details | Yes |
| Purchase order data | PO history with delivery dates, quantities, quality records | Yes |
| Contract terms | Pricing, SLAs, penalty clauses, renewal dates | Yes |
| Quality data | Defect rates, inspection results, CAPA records | Yes |
| Supplier self-assessment | Financial health, capacity utilization, certifications | No |
| Market intelligence | Alternative suppliers, commodity pricing trends | No |
| Strategic priorities | Innovation goals, sustainability requirements, localization | No |
Step-by-Step Process
Step 1 — Supplier Segmentation
Classify suppliers into tiers to allocate management effort appropriately:
| Tier | Criteria | Supplier Count | Management Model |
|---|
| Strategic | High spend, high impact, few alternatives | ~5-10% | Executive sponsorship, QBRs |
| Preferred | Significant spend, good alternatives exist | ~15-20% | Regular reviews, scorecards |
| Approved | Moderate spend, commodity items | ~30-40% | Periodic audits, KPI tracking |
| Transactional | Low spend, easily substitutable | ~30-50% | Automated monitoring only |
Use a 2x2 matrix of supply risk (vertical) vs. profit impact (horizontal) following the Kraljic model to validate segmentation.
Step 2 — Performance Scorecard
Score each supplier across five dimensions:
| Dimension | Weight | Key Metrics | Scale |
|---|
| Quality | 30% | Defect rate (PPM), first-pass yield, CAPA closure time | 1-5 |
| Delivery | 25% | On-time in-full (OTIF), lead time adherence | 1-5 |
| Cost | 20% | Price competitiveness, cost reduction YoY, invoice accuracy | 1-5 |
| Responsiveness | 15% | RFQ turnaround, issue resolution time, communication | 1-5 |
| Innovation | 10% | New product contributions, process improvements, patents | 1-5 |
Scoring guide:
- 5 = Exceptional (top 10% benchmark)
- 4 = Exceeds expectations
- 3 = Meets expectations
- 2 = Below expectations (improvement plan required)
- 1 = Unacceptable (escalation or exit)
Calculate a weighted composite score. Track trends over 4+ quarters.
Step 3 — Capacity Assessment
Evaluate each strategic and preferred supplier's capacity:
| Factor | Assessment Method | Red Flag Threshold |
|---|
| Utilization rate | Self-reported + on-site verification | > 85% sustained |
| Financial health | Credit reports, financial statements, Z-score | Z-score < 1.8 |
| Workforce stability | Turnover rate, key-person dependency | Turnover > 25% |
| Capital investment | CAPEX plans, equipment age, technology roadmap | No investment in 24 mo |
| Scalability | Can they handle 1.5x and 2x current volume? | Cannot scale 1.5x in 90d |
| Sub-tier dependencies | Mapping of their critical suppliers | Single-source sub-tier |
Flag suppliers approaching capacity ceilings and plan alternatives proactively.
Step 4 — Risk Profiling
Build a risk register for each strategic supplier:
| Risk Category | Indicators | Probability | Impact | Score |
|---|
| Financial failure | Declining margins, high leverage, late payments | L/M/H | L/M/H | 1-25 |
| Operational disruption | Single site, aging equipment, labor issues | L/M/H | L/M/H | 1-25 |
| Geographic risk | Natural disaster zone, political instability | L/M/H | L/M/H | 1-25 |
| Compliance risk | Regulatory changes, certification lapses | L/M/H | L/M/H | 1-25 |
| Cyber / data risk | IT maturity, data handling practices | L/M/H | L/M/H | 1-25 |
| Reputational risk | ESG violations, labor practices, media exposure | L/M/H | L/M/H | 1-25 |
Assign a composite risk score and define risk mitigation actions for any supplier scoring above the threshold.
Step 5 — Contract Compliance Monitoring
Audit contract adherence systematically:
- Pricing compliance: Compare invoiced prices to contracted rates; flag variance > 2%.
- SLA adherence: Track OTIF, quality, and responsiveness against contractual minimums.
- Volume commitments: Monitor actual spend vs. committed volumes (both buyer and supplier side).
- Penalty / rebate triggers: Identify whether penalty or rebate thresholds have been reached.
- Renewal and termination dates: Maintain a 12-month forward calendar of contract milestones.
- Regulatory compliance: Verify certifications (ISO, FDA, SOC2, etc.) remain current.
Step 6 — Development Plans and Relationship Governance
For strategic and underperforming suppliers, create a Supplier Development Plan:
| Plan Component | Detail |
|---|
| Performance gap | Specific KPIs that need improvement, with targets |
| Root cause | Joint analysis of why performance is lagging |
| Improvement actions | Concrete steps with owner and due date |
| Support offered | Training, process engineering, co-investment |
| Review cadence | Weekly for critical gaps, monthly for standard |
| Exit criteria | Conditions under which the relationship is terminated |
Establish governance rhythms: quarterly business reviews for strategic suppliers, annual reviews for preferred, audit cycle for approved.
Output Format
## Supplier Management Review — [Category/Supplier] — [Period]
### Executive Summary
- Suppliers reviewed: [count] across [categories]
- Average composite score: [X/5] (prior period: [Y/5])
- High-risk suppliers identified: [count]
- Contract compliance rate: [%]
### Supplier Segmentation
| Tier | Count | Total Spend | Avg Score |
|---------------|-------|---------------|-----------|
| Strategic | ... | ... | ... |
| Preferred | ... | ... | ... |
| Approved | ... | ... | ... |
| Transactional | ... | ... | ... |
### Performance Scorecards (Strategic Suppliers)
| Supplier | Quality | Delivery | Cost | Responsive | Innovation | Composite | Trend |
|----------|---------|----------|------|------------|------------|-----------|-------|
| ... | ... | ... | ... | ... | ... | ... | ... |
### Risk Register (High-Risk Items)
| Supplier | Risk Category | Score | Mitigation Action | Owner | Due Date |
|----------|---------------|-------|-------------------|-------|----------|
| ... | ... | ... | ... | ... | ... |
### Contract Compliance Summary
| Supplier | Pricing | SLA | Volume | Certifications | Overall |
|----------|---------|-----|--------|----------------|---------|
| ... | ... | ... | ... | ... | ... |
### Development Plans
- [Supplier A]: [Gap] -> [Target] by [Date]
- [Supplier B]: ...
### Recommendations
1. [Prioritized action items]
Quality Checklist
Edge Cases
- Sole-source supplier with no alternative: Maintain the relationship carefully; invest in dual-qualification of a backup; negotiate longer-term contracts with performance guarantees and buffer stock agreements.
- Supplier in financial distress: Increase monitoring frequency to weekly; secure inventory buffers; accelerate qualification of alternatives; consider advance payments tied to performance milestones.
- Mergers and acquisitions affecting suppliers: Reassess capacity, risk, and contract terms post-transaction; validate that certifications and capabilities transfer to the new entity.
- Supplier in a sanctioned or high-risk country: Engage legal and compliance teams; ensure trade compliance; evaluate reshoring or near-shoring alternatives.
- Rapid scale-up requirement: Pre-negotiate surge capacity clauses; maintain a qualified backup list; consider consignment stock arrangements for critical components.
- Supplier refusing transparency on sub-tier suppliers: Escalate through contract provisions; make sub-tier visibility a condition of preferred status; conduct independent supply chain mapping.
