The Key Performance Indicators (KPIs) and associated targets must be SMART (Specific, Measurable, Achievable, Realistic, and Time-bound). The targets of "delivery in an hour" and "return orders in an hour" for an international supplier are fundamentally flawed because they are not Achievable or Realistic. International logistics involve significant time for transportation, customs clearance, and handling, making a one-hour turnaround physically impossible. Setting such unattainable goals undermines the purpose of performance management, leading to supplier demotivation and damaging the relationship rather than driving improvement. The targets are not justified by the operational realities of a global supply chain.

A. Yes, because these targets will propel the suppliers to continuous improvement

Unattainable targets are demotivating and can be perceived as punitive, hindering rather than propelling continuous improvement and collaboration.

B. No, the local suppliers are always the best choice

This is an unsubstantiated generalization. The choice between local and international suppliers depends on many strategic factors; the issue here is the target-setting, not the supplier's location.

D. Yes, the higher the targets are, the better the outcomes will be

This is a fallacy. While challenging "stretch" goals can be effective, impossible targets lead to frustration, disengagement, and a breakdown in performance.

1. CIPS L4M3 Commercial Contracting Study Guide (2018)

Chapter 5: Performance Management. The guide emphasizes the use of the SMART framework for setting objectives and KPIs. It states that targets must be 'Achievable' and 'Realistic'

meaning they should be attainable given the available resources and constraints. A one-hour international delivery target directly violates these principles. (Specific reference: Section on 'SMART objectives').

2. Lysons

K.

& Farrington

B. (2020). Procurement and Supply Chain Management (10th ed.). Pearson. In Chapter 15

"Supplier Relationship Management

" the authors discuss performance measurement

stating that "KPIs should be realistic and attainable... Unrealistic targets will only serve to demotivate the supplier" (p. 431). This directly supports the reasoning that the proposed targets are inappropriate.

3. Locke

E. A.

& Latham

G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist

57(9)

705–717. https://doi.org/10.1037/0003-066X.57.9.705. This foundational academic work on goal-setting theory demonstrates that for goals to be motivating

they must be perceived as attainable. Goals that are impossible to achieve do not lead to higher performance.