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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.

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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

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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.

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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]

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Quality Checklist

• Supplier segmentation reflects current spend and risk landscape
• Scorecard metrics are objective, measurable, and consistently applied
• Performance data covers at least the trailing 12 months
• Capacity assessment includes financial health and sub-tier mapping
• Risk register updated with current geopolitical and market conditions
• Contract compliance audit covers pricing, SLAs, and certifications
• Development plans have specific targets, owners, and deadlines
• Governance cadence defined and calendar invites issued
• Results communicated to procurement, quality, and operations stakeholders
• Supplier feedback collected and incorporated into the process

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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.