Two Approaches to Food Vendor Performance Management

Choose a quantitative or a qualitative approach

Vendor performance management is an essential and never-ending task for any business. This of course includes foodservice businesses. In some ways, foodservice businesses are particularly vulnerable to vendor issues—after all, if a restaurant has a supply chain issue, they can’t put customers’ meals on backorder! All food products need to be delivered by vendors on time, in the right quantities, and at the peak of freshness in order for a foodservice business to succeed.

When it comes to making sure vendors continue to deliver the high level of service that foodservice businesses require, some kind of vendor performance management is needed. There are two main approaches you might choose: dashboard displays or the Balanced Scorecard.

Start with the right KPIs

No matter which approach you choose, you will need real time information about the vendor’s performance. This can be gleaned through the use of KPIs or Key Performance Indicators. There are many different aspects of vendor performance you can measure with KPIs:

• Delivery lead times
• Communication time lags
• Quality of the products supplied
• Order accuracy
• Price
• Payment terms
• Billing accuracy
• Competitiveness with other vendors
• Financial stability

Why Use Dashboards

A dashboard approach to vendor performance management involves collecting data on all the KPIs and displaying it in a visual format that is updated constantly as new data comes in. This approach makes it easy to see trends in vendor performance, giving the foodservice company the ability to intervene and make changes. The dashboard approach is very quantitative as it gives you the numbers on specific aspects of vender performance.

Why Use the Balanced Scorecard

When a more well-rounded picture of vendor performance is desired, the Balanced Scorecard approach may be used. The Balanced Scorecard was developed at Harvard Business School as a way to help companies set, track, and achieve key business objectives in support of strategic goals. In a Balanced Scorecard approach to vendor performance management, the KPIs will be divided into four sections, each of which support the vendor’s overall ability to achieve the client’s goals. These sections are Relationship, Cost Management, Delivery, and Quality. Looking at performance in this way helps ensure that foodservice clients get a 3D view of vendor performance which is more qualitative than quantitative.

In either case, open channels of communication between the foodservice company and the vendor are essential for making improvements based on the insights gleaned through analytics.

Ready to Improve Vendor Relationships for Your Clients?

If you are a foodservice consultant looking for a better way to help your clients manage food vendor performance, you need to try MyFieldAudits. This cloud-based analytics platform was specifically designed for the restaurant and foodservice industry and includes all the robust features needed to collect, analyze, display, and share information that will help improve the vendor relationship. To learn more, contact us at info@MyFieldAudits.com and request a free demo.