Supplier development: when and how to improve a supplier

Development vs escalation

Escalation reacts to a problem and puts pressure on the supplier. Development is a planned investment of your own time to make a supplier better, because replacing it would be slower or more expensive. Both often run in parallel: escalation stops the bleeding, development fixes the system.

Which suppliers to develop

• Strategic: single source, hard-to-replace technology or a large spend.
• Willing: management commitment and resources on the supplier’s side.
• Clear gaps: from scorecard, audits and complaints, not just a feeling.
• Not when the supplier has no capacity or interest; then plan a phase-out instead.

A development plan that works

• Baseline: current KPIs, audit result, top defect Pareto.
• Targets: 2–3 measurable goals with dates (for example PPM from 400 to 100 within 6 months).
• Actions: owned by the supplier, supported by you (workshops on FMEA, SPC, problem solving, error proofing).
• Reviews: monthly, on data; on-site every 1–3 months.
• Closure: targets met for 3 months and confirmed by a follow-up audit.

Measure the effect

Track the same KPIs as in the scorecard before and after, plus process capability of the critical characteristics. If after two review cycles nothing moves, change approach or escalate; development without results only delays the decision.