When a certified supplier’s delivery performance declines, a company should respond initially by

communicating with the supplier to investigate the source of the problem. A certified supplier is a

supplier that has met certain quality, delivery, and service standards and has been approved by the

company to supply goods or services without inspection or testing. A certified supplier is expected to

maintain a high level of performance and reliability, as well as to report any issues or deviations that

may affect the delivery process. However, sometimes a certified supplier may experience a decline in

delivery performance, which can cause delays, disruptions, or dissatisfaction for the company and its

customers.

The best way to deal with a decline in delivery performance from a certified supplier is to

communicate with the supplier and find out the root cause of the problem. Communication is

essential for maintaining a good relationship with the supplier and for resolving any issues or

conflicts that may arise. Communication can help the company and the supplier to understand each

other’s expectations, needs, and challenges, as well as to identify and implement corrective actions

or preventive measures. Communication can also help to restore trust and confidence between the

parties and to prevent further deterioration of performance.

Tightening performance criteria for the supplier is not an appropriate initial response when a

certified supplier’s delivery performance declines. Tightening performance criteria means imposing

stricter standards or requirements on the supplier, such as reducing lead times, increasing penalties,

or demanding more frequent reports. Tightening performance criteria may seem like a way of

holding the supplier accountable and motivating them to improve their performance, but it can also

have negative consequences. Tightening performance criteria can create more pressure and stress

for the supplier, which can affect their quality, productivity, or morale. It can also damage the

relationship with the supplier, as it may signal a lack of trust, respect, or cooperation from the

company.

Establishing a temporary buffer of finished goods inventory at the supplier is not an effective initial

response when a certified supplier’s delivery performance declines. Establishing a temporary buffer

of finished goods inventory means storing extra units of products at the supplier’s location to

compensate for any delays or shortages in delivery. Establishing a temporary buffer of finished goods

inventory may seem like a way of ensuring availability and continuity of supply, but it can also have

drawbacks. Establishing a temporary buffer of finished goods inventory can increase inventory costs,

such as holding costs, transportation costs, or obsolescence costs. It can also reduce inventory

visibility and control, as it may be difficult to track or manage the inventory at the supplier’s location.

Moreover, establishing a temporary buffer of finished goods inventory does not address the root

cause of the decline in delivery performance, but rather masks or postpones it.

Increasing the standard lead time of the component to allow for supplier delays is not a suitable

initial response when a certified supplier’s delivery performance declines. Increasing the standard

lead time of the component means extending the time between placing an order and receiving it

from the supplier. Increasing the standard lead time of the component may seem like a way of

adjusting to the decline in delivery performance and avoiding late deliveries, but it can also have

disadvantages. Increasing the standard lead time of the component can reduce customer satisfaction

and loyalty, as it may result in longer waiting times or missed deadlines for the customers. It can also

reduce operational efficiency and flexibility, as it may limit the ability to respond to changes in

demand or supply. Furthermore, increasing the standard lead time of the component does not solve

the problem of the decline in delivery performance, but rather accepts or tolerates it.

Reference := Supplier Performance Metrics and Scorecard - IADC.org, Delivery Performance

Explained (Measures, KPIs, and How to Improve), How to manage supplier performance -

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