eThesis - Kauppakorkeakoulun sähköiset gradut

Objectives of the Study This study explores how companies can develop a supplier performance measurement system and thereto related practices. The research objective is to outline steps for developing supplier performance measurement that would be in alignment with the organizational objectives and respond to organizational needs. Furthermore, this study addresses a challenge of having a large amount of suppliers in the supply base when developing a supplier performance measurement system. Theory demonstrates that not all suppliers are of equal value to the organization. Thus, as to what pertains to measuring performance of different and many suppliers, this study aims to illustrate how supply base can be segmented into supplier groups and each can be measured in a differentiated way.

Academic background and methodology A literature review was conducted on performance measurement, supplier performance and supplier segmentation. Based on synthesis of theory, a framework was created that is intended for developing a supplier performance measurement system as well as differentiated practices based on supplier segmentation. For empirical research, case study was adopted as a main research method, and empirical data was collected through semi-structured interviews and online survey.

Findings and conclusions First and foremost, findings reveal that a process outline is needed to mitigate the complexity involved with development of a supplier performance measurement system. As a research outcome, this study presents a process framework. Furthermore, it was concluded that performance of all suppliers cannot be measured in an identical manner. Results implicate that companies' supply bases should be segmented in order to classify supplier groups and develop differentiated performance measurement approaches. Thus, segmenting supply base was added as a distinct step to the development process of supplier performance measurement and was recognized as an essential step.