RL-009 Ver 1.0 (Jan 24)
Key things to remember
When we contract with a Supplier they need to maintain a level of Performance that meets the requirements of both CBRE and our Client. Whe the Performance drops, there may be a need for a performance review. Carrying out any such review must always be done during the contract term.
Why? This ensures the budget versus actual performance is re-assessed in order to potentially make adjustments for the remaining tenure of the Supplier partners contract term, if not already completed annually.
Why do we need to manage our Suppliers Performance ?
What drives the need for a PIP
(Performance Improvement Plan) ?
1. Early Supplier engagement is key to a successful outcome for Performance improvement
2. Present FACTS, not emotive ideas
3. Ensure a measurable process is in place to manage performance
4. Ensure the supplier understands the expectations of the contract and its required outcomes
5. Openly discuss issues in regular meetings to mitigate any escalations, where practical
6. Form the right relationships with the Supplier partners to foster best-in-class practices
How do we implement a PIP ?
1st Phase - Formal written warning:
The Global Procurement Solutions lead (or account Procurement leader) will submit a formal written warning to any Supplier partner under any one or combination of the following conditions:
- One quarterly performance rating with the overall aggregate supplier score and / or Customer Satisfaction score of less than 3.0
- Net Promoter scores of less than 10.0
The Global Procurement Solutions Lead (or account Procurement leader) will review the Supplier partner performance within 6 months of any supplier receiving a warning
2nd Phase - Formal Supplier Performance Improvement Plan (PIP):
A Supplier will assist in managing a PIP under any one or combination of the following conditions:
- Two (2) consecutive quarterly performance ratings with an overall supplier score and / or Customer satisfaction score of less than 3.0
- Two (2) consecutive Net Promoter scores of less than 10.0
Confidential & Proprietary | 2024 CBRE Inc.
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Managing Supplier Performance
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Page 1 of 4
1:
Poor KPI Performance
2:
Not adhering to the SLA
3:
Financially underperforming
4:
Low Customer Satisfaction
5:
External Factors
6:
Scope change
RL-009 Ver 1.0 (Jan 24)
Root Cause Analysis (RCA) Guideline
Confidential & Proprietary | 2024 CBRE, Inc.
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Conducing Root Cause Analysis (RCA)
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Page 2 of 4
Root Cause Analysis (RCA) is an activity that must be followed to address a problem or non-conformance which has been identified, often through an internal or external audit.
Root Cause Analysis investigates why a problem or non-conformance has occurred and gets to the “fundamental” root cause of the problem and enables us to find effective solutions and therefore prevents its recurrence.
Why complete a RCA ?
Root Cause Analysis (RCA) is an activity that is followed to address a problem or non-conformance that has been identified, often through an internal or external audit.
Root Cause Analysis investigates why a problem or non-conformance has occurred and gets to the “fundamental” root cause of the problem and enables us to find effective solutions and therefore prevents its recurrence.
What does a RCA address ?
1:
Resolves Customer
complaints
2:
Deals with Equipment
failures and issues
3:
Manages Non-Compliance
4:
Supports Corrective Actions
Implementing the RCA (5 Steps)
Transitioning
of Supplier
Program Optimisation - Change of SOW
Renewed Savings Directives
Cost-Plus Supplier overspending
Contract sunsets within
6 months
5
4
3
2
1
Improve Data Analytics
Accelerate Digital Transformation
Reduce Spend Cost
Manage & Mitigate Inflation
Reduce Procurement Risk
5
4
3
2
1
Implement Solutions
5
Identify Root Cause
4
Identify factors that caused the issues
3
Collect Data
2
Define the Problem
1
What do you see happening?
What are the symptoms?
How long has the problem existed?
What is the impact?
What events lead to the problem happening?
What is the reason the problems occurred?
What actions can prevent the problem occurring again?
How will the solution be implemented?
Who is responsible to complete?
The RCA Flow Chart
RL-009 Ver 1.0 (Jan 24)
Supplier Performance Improvement Process (PIP)
Is...
- A strategic Supplier corrective action process
- Defined service improvement objectives and timelines
- Championed by supply chain leadership, but managed by the supplier partner
- A measurement of Supplier improvement resulting in sustainable service quality
- A regular cadence of reviews to discuss Supplier progress to plan
- A final disposition of Supplier partner performance used to determine the Supplier’s status with CBRE
- A process that can be launched at the account level or central operations support team
Is NOT...
- A day-to-day Supplier quality management process
- An emotionally driven process
- A tool to beat down Supplier's into conformance
- A process that has no end or result
- Measured by subjective data
​
Responsibility
Performance: Account Teams
KPI's Source: Supplier
Responsibility
Account team Procurement Leader
Country Lead
Procurement Platform Lead, or Divisional Procurement Lead
Responsibility
Supplier supported by appropriate CBRE team
Responsibility
KPI Source: Supplier
Performance: Account teams
Refine corrective action: CBRE
Responsibility
KPI Source: Supplier
Performance: Account teams
QBR: Category Managers
Measure
Define
Improve
Monitor
Sustain
- Poor overall Customer Satisfaction ratings
- Poor Supplier Net Promoter Score
- KPI's below expectations
- Establish service issues
- Desired outcomes
- Performance Improvement Team & Champions
- Identify "Root Cause" using best practice tools
- Brainstorm improvement ideas
- Develop & execute improvement plan
- Monitor progress and affects on changes
- Evaluate data trends in response to changes
- Adjust corrective action as needed
- Use of KPI's to manage service delivery
- Cadence of Performance feedback-KPI alignment
- Cadence of Business reviews-align client expectations
Establish Service
Issues
Project Plan
Implement
Improvement Plan
Measure
Improvement Process
NEW QUALITY
CULTURE
Confidential & Proprietary | 2024 CBRE, Inc.
Useful Links
Resource Library
Supplier Performance Improvement Process (PIP)
Resource Library
Page 3 of 4
Review Objective evidence of poor performance over time including prior Corrective Action efforts
RL-009 Ver 1.0 (Jan 24)
Next Steps- Implementing the PIP
Confidential & Proprietary | 2024 CBRE, Inc.
Resource Library
Performance Improvement Process Steps
Resource Library
Page 4 of 4
1
Identify and document improvement Objectives, desired outcomes and Timing
2
Identify Key Stakeholders which include the Supplier partner
3
Identify Performance Improvement Team and Team Champions
4
Gain sponsorship and approval from Supply Chain key Stakeholders to launch a 90 day PIP
5
Complete a Charter to communicate the PIP Objectives, timing, support, tools and outcomes
6
Communicate the launch of the 90 day PIP and explain the overall process
7
Schedule meetings with all Stakeholders to launch the PIP
8
Request Supplier to initiate the 90 day PIP
9
Supplier to create a progress Dashboard that communicates the overall improvement status
10
Communicate agreement on timing, reporting and expected outcomes to all
11
Plan for final review after 90 days and any next steps
12