Measuring Performance

SRM programs also require that companies establish metrics to measure vendor performance — and get supplier buy-in on these metrics. That's standard procedure at Novartis. “We have a discussion with vendors to get their feedback and see if they have things they would like to be measured on. Then we come to an agreement,” says Woychik. She identifies key performance indicators (KPIs) in each vendor's service agreement — things like quality of service, cost or economic value, innovation, and assurance of supply or capacity.

At HP, the meetings services team uses service-level agreements (SLAs) that relate to each vendor category to manage its “HP-approved” suppliers and assess performance at regular review meetings. The frequency of contact with vendors “really depends on the supplier and what service they are providing for us,” says Iwamoto, “although, I have found that most times it's better to over-communicate.”

In these reviews, Iwamoto says the team discusses the “scope-of-work” document with each supplier as well as the SLA that governs the relationship. “We look at metrics and KPIs to see how they are trending. And we look at volume to see if there is any change in patterns and why these changes might be occurring.”

But in a service-oriented industry like meetings, establishing metrics to quantify performance may make some suppliers wary. “For the vendors, there is a part of the process that they don't have control over, and that can be pretty daunting,” says Woychik, “like when they're asked to deliver a product launch for us four times faster than usual — and know they will be measured on their performance. But these are best-in-class vendors, and they are our preferred vendors for a reason.”

She is quick to note that performance shouldn't be over-engineered either. A common pitfall to avoid: Developing more KPIs than are necessary. “When we first came out with this process we thought we needed a big list of KPIs, but in reality, many aspects of performance roll up under a couple of overall indicators.”

Woychik and her team spent a lot of time communicating the performance review process to the vendors during their SRM rollout, and she advises planners to do the same. “Don't develop all the KPIs on your own.” It should be a discussion and an agreement that the meetings department and the vendor come to together, and planners should get the meeting stakeholders involved in the discussion as well.

Woychik reviews supplier performance on a quarterly basis with her core team of stakeholders and a group of end users. Vendors are at the table during these review meetings to discuss performance data, and the team meets with each vendor separately to provide feedback. “Because we manage so many meetings, we're really trying to identify and address performance trends with this step, as opposed to focusing on one-off issues that may have occurred.” She also includes survey data from meeting attendees.

While this two-way dialogue can be very beneficial in managing performance, the challenge is to ensure the feedback is constructive. “The best scenario,” says Woychik, “is if the [internal client] can provide the vendor with some feedback prior to the sit-down, so the vendor has a chance to digest that information. Sometimes they are presented with new information in that discussion that they were previously unaware of. That can be a bit awkward.”

Eyeing the Future Together

Supplier relationship management extends beyond building stronger communications and performance measures to having suppliers go to bat for their clients, says Advito's Odom. “It's not just about cost savings and risk mitigation. A supplier's expertise can also help optimize the relationship with an eye toward enhancing the program.”

“Any good supplier should be partnering with clients to drive continuous improvement into the meetings program,” agrees Kristen Dierickx, CMP, national director of strategic meetings management for BCD Meetings & Incentives. “They are the ones living and breathing this process every day and getting the direct feedback from their meeting contact as well as the attendees themselves. The onus is really on the supplier to be taking the pulse of the SMMP and offering up solutions for improvement.”

In fact, it was through a vendor that Woychik got the idea to use a software tool that allowed users to build their own registration Web sites from a template. In the past, her team would build custom sites for each meeting. “We went from spending two weeks on building these sites, to creating and building them in a single afternoon,” says Woychik. Starting this year, the team migrated over to the new software tool for all its meetings and no longer builds home-grown sites for each event.

The biggest challenge, says Woychik, is that “we're so focused on the day-to-day aspects of planning the meeting, it's difficult sometimes to look further into the future. But we don't want to be an organization that is standing still. We want to constantly push forward to the next level and evaluate how our vendor partners can help us get there.”

At the Starting Line

Sharon Marsh knows the value of a strong supplier relationship management program: She's helped implement vendor management processes for the meeting teams at both Cisco and VeriSign, and now, as the new meetings group manager for Medtronic, Santa Rosa, Calif., she's about to do it again.

The company has a mature strategic meetings management program, “but we don't have a strong SRM process in place yet,” says Marsh, who took the role just two months ago. Her first step is to put service-level agreements in place with preferred suppliers that include key performance metrics for measuring vendors.

While the company is taking its SMMP global through its headquarters in Minneapolis, Marsh says she will be assessing the vendor management piece on a regional level, focusing first on the California branch. “We are looking at the categories where Medtronic puts the majority of its meetings spend, and we are going out to bid in these areas. We are going to let vendors know what we spend on average in a year and look for preferred vendors to start an SLA [service-level agreement] with.”

The process will allow Medtronic to hold suppliers to specific performance standards outlined in their contracts and help Marsh and her team determine if they are getting the best value from their partnerships.

It's a good approach, notes George Odom, senior director of business development at Dallas-based Advito. “SRM is not something that happens overnight. In most cases it starts out as a strategic sourcing initiative and evolves into measuring metrics and data. That can then lead to suppliers moving from a role of order-taker to one of business partner.”

“It's a journey,” he adds. “It's iterative, so the more you get into it, the better you get at it. If you find that five years from now you're measuring and managing everything the same way you are today, you didn't do it right.”

Novartis' Five-Step Srm Process

Speaking at the Fourth Annual Pharmaceutical Meeting Planners Forum in Baltimore last March, Alice Woychik, director of meeting solutions for Novartis, East Hanover, N.J., gave attendees a rundown of her company's five-step supplier relationship management process.

Step 1: Supplier Qualification. A core team consisting of Novartis stakeholders and key personnel from the meeting solutions and strategic sourcing departments develop and implement criteria for vendor assessment that is consistent across all suppliers. This step mandates that vendors use Novartis' uniform processes to ensure consistency.

Step 2: Supplier Segmentation. In this step, supplier data is typically segmented by meeting type and meeting location. For example, the supplier will need to track and report on different data for an investigator meeting than for a speaker training meeting.

Step 3: Supplier Performance Measurement: Here, key performance indicators (KPIs) are laid out in each vendor's service agreement and cover such components as quality of service, cost, innovation, compliance, and assurance of supply or capacity.

Step 4: Supplier Assessment. Suppliers are measured on whether they are meeting the previously established KPIs and metrics. Review meetings are conducted quarterly.

Step 5: Supplier Relationship Optimization. In this final step, Novartis aims to optimize supplier performance with a focus on future development. These discussions with the vendor involve analyzing what is going right and what is going wrong and determining how both parties can better work together to further the company's strategic objectives.

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