Supplier Performance Management Policy – Effective from 1st January, 2021.
K M Group appreciates that diligent Supplier/Vendor Performance Management in business, is both prudent and wise, to ensure the Vendors/Suppliers support K M Group’s delivery to Client expectations, and in protection of the K M Group's Brands reputation. K M Group expects Suppliers to fulfill procured orders on the basis of the deliverables being On Time, In Full and Invoiced Correctly. This industry standard is referred to as OTIFIC, and is adopted across the Group's full Supply Chain.
K M Group acknowledges and recognises the areas of risk that exist within its Supply Chain, and proactively monitors Supplier performance, operates this monitoring of Suppliers against the OTIFIC standard, to track, monitor and assess Supplier performance against the desired and acceptable standards, and seeks to avoid, reduce or mitigate any such quantifiable, mitigatable or avoidable risks to its trading status and reputation, via careful stewardship of its Supplier engagements, etc.
K M Group’s Procurement and Supply Chain Management Department operates a strict regime of Ethical Sourcing and Due Diligence upon the Supply Chain, and applies PAS 91 processes to the selection, approval, verification and maintenance of all approved Subcontractor Suppliers status.
A scorecard and tally is kept of Supplier performance on a simple pass/fail basis and percentage measure against volume for each of the three core performance elements that comprise OTIFIC. Each of these three elements represents 33.3% each of the basic KPI total. This is over and above core compliance matters related to Regulatory, Legislational and Accreditaion maintenance related requirements.
A Preferred Supplier List (‘PSL’), drawn from the Approved Suppliers List (‘ASL’) of PAS 91 compliant Suppliers is operated. At least three suitable Suppliers are maintained for each category, to provide Supply Chain Resilience in the event of Supplier non-performance or failure. Ideally, three Preferred Suppliers are sought from a number of Approved Suppliers for each Category. This is subject to ongoing review.
Materially significant failure in performance of contractual obligations, any failure to provide or maintain compliant records or demonstrated compliance with Legislation, Regulations or Accreditation requirements, or breach of any associated K M Group Supplier related Policy, or three consecutive months of consistent performance failures despite required corrective actions to reach the minimum acceptable KPI on OTIFIC, may result in Supplier suspension and removal from the PSL and/or ASL. This may be temporary or permanent, at the express determination of the Managing Director.
Sub-Optimal and Sub-Standard Performance Management
Any Supplier at 66% pass rate against KPI or below is regarded as performing sub-optimally and the Supplier may be challenged to improve with notification of failures against desired performance levels and assurances may be sought that improvements will be identified and implemented efficaciously within the immediate Quarter, and will be subject to close monitoring in the following Quarter, failure to do so may result in removal from the ASL. Any Supplier below 33% is regarded as completely unsatisfactorily sub-optimal and would be subject to an Improvement Notice and required corrective actions to be completed by a mutually agreed point in time. Any failure to thusly improve and meet these requirements, may result in removal from the PSL and/or ASL. This may be temporary or permanent, at the express determination of the Managing Director.
Our Commitment Managing and Mitigating Risk
K M Group endeavours to provide high quality, good value and reliable products and services to its Clients and Customers. Strenuous efforts are applied to source, evaluate and effectively manage Suppliers, to maintain delivery to the highest possible standards. Any Supplier deemed to be compromising the good standing of K M Group or any of its business units, divisions, trading styles or Brands, will be subject to immediate review, may be issued with an Improvement Notice, or may be removed from the ASL with immediate effect. This may be temporary or permanent, at the express determination of the Managing Director.
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