Service Design
Supplier Management
Introduction
Supplier Management
aligns with corporate requirements
and other IT and Service
Management processes.
Objectives
The purpose of Supplier Management
is to obtain value for money from suppliers
and ensure suppliers
perform according to the contracts and agreements.
Objectives of Supplier Management are:
• Obtain value for money from supplier and contracts.
• Ensure that underpinning contracts and agreements with suppliers are aligned to business needs, support, targets
in SLRs and SLAs.
• Manage relationships with suppliers.
• Manage supplier performance.
• Provide assistance in managing,
negotiating and agreeing
on the contracts with suppliers.
• Maintain a supplier
policy
and a supporting Supplier and Contract Database
(SCD).
Supplier Management manages
the contract lifecycle.
The contract lifecycle contains integral processes that ensure contracts are maintained and managed
properly.
Processes carried out by Supplier
Management include:
• Evaluation of new suppliers and contracts.
• Supplier categorization and maintenance of the Supplier and Contracts
Database (SCD).
• Establishing new suppliers and contracts.
• Supplier and contract management performance.
• Contract renewal and/or termination.
Many Key Performance Indicators (KPIs) can
be used to assess the effectiveness and efficiency of the Supplier Management
processes
and activities.
Some of the metrics include:
• Business protection from poor supplier performance or disruption
• Alignment of supporting services and their targets with business
needs
and targets
• The availability of services is not compromised
by supplier performance
• Clear ownership and awareness of supplier and contractual issues
Scope
The supplier management process should include:
• Implementation and enforcement of the supplier policy
• Maintenance of an SCMIS
• Supplier and contract categorization and risk assessment
• Supplier and contract evaluation and selection
• Development, negotiation and agreement of contracts
• Contract review, renewal and termination
• Management of suppliers
and supplier performance
• Identification
of improvement
opportunities for
inclusion in the CSI register, and the implementation of service and supplier improvement plans
• Maintenance of standard contracts, terms and conditions
• Management of contractual dispute resolution
• Management of sub-contracted suppliers
Supplier Categorization
Some form of categorization
scheme should exist within the supplier
management process to categorize the supplier and their importance to the service provider and the services
provided to the business.
One of the best methods for categorizing
suppliers is based on assessing the risk and impact associated with using the supplier,
and the value and importance
of the supplier and its services to the business.
The amount
of time and effort spent managing the supplier
and the relationship can then be appropriate to its categorization.
Roles
The responsibilities of a Supplier Manager
include:
• The achievement of the process goals.
• Assistance for SLAs, contracts
and agreements.
• Value for money is obtained from all IT suppliers.
• Consistency of all IT supplier processes.
• All suppliers and contracts are reviewed and risk-assessed on a regular basis.
More details on the responsibilities of a Supplier
Manager:
• Assist in developing and reviewing
SLAs, contracts, agreements and
documentations.
• Ensure value for money is obtained.
• Ensure all IT supplier processes are consistent.
• Maintain and review Supplier and Contracts database (SCD).
• Review and risk assessment of all suppliers and contracts.
• Ensure underpinning
contracts, agreements and SLAs align with the business.
• Ensure all supporting services are scoped and documented.
• Ensure all roles and relationships documented
and maintained.
• Review contracts and SLAs.
• Update contracts
or
SLAs when required
and
proceed with
Change
Management.
• Monitor, report and review supplier performance.
• Ensure changes are assessed.
• Coordinate and support all individual IT supplier and contract managers.
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