SS-051 Ver 1.0 (May 23)

4. Key Points

There may be many triggers that activate the 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. 

Examples of Commercial and Qualitative challenges that may be the subject of a review are but are not limited to:

• A change in service scope, either increase or decrease
• Supplier partner's performance against KPI’s or the SLA
• Poor financial performance
• Budget challenges through client cost-save requirements
• Budget overspends, reduced budgets, commercial challenges
• Service scope and specification changes
• Innovation, refurbishment, new build and right-sizing
• Anticipated change in supplier
• CBRE scope enhancement

1. The Importance of Good Supplier partner Performance

2. Escalation and Cause / Effect Elements Driving a PIP

1.

Poor KPI

Performance

2.

Not adhering

to the SLA

3.

Financially

underperforming

4.

Low Customer

Satisfaction

5.

Outside

Influences

6.

Scope

change

1. Early Supplier partner 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

3. Escalation and Lead in to a PIP being conducted

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:

1. One quarterly performance rating with the overall aggregate supplier score and / or Customer Satisfaction score of less than 3.0
2. 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

Formal Supplier partner Performance Improvement Plan (PIP):

A Supplier partner will assist in managing a PIP under any one or combination of the following conditions:

1. Two (2) consecutive quarterly performance ratings with an overall supplier score and / or Customer satisfaction score of less than 3.0
2. Two (2) consecutive Net Promoter scores of less than 10.0

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5. Useful Links

Security Services

Managing Supplier Performance

Transition

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SS-051 Ver 1.0 (May 23)

Refer to following page for details on the 5 key step approach

1. Root Cause Analysis Guideline

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. This method can also be applied to any other problem-solving activities.

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.

Root Cause Analysis is:

• An essential way to perform a comprehensive, system-wide review of significant problems, as well as the events and factors leading up to each
• An application of a series of well-known, common sense techniques that may produce a systematic, quantified, and documented approach to the identification, understanding, and resolution of underlying causes of a problem or non-conformance. 

Root Cause Analysis is regularly and commonly applied to (this list is not exhaustive):

• Resolving customer complaints
• Equipment failures
• Process non-compliance
• Identifying non-conforming materials via a material review process, depending upon specific customer or business requirements 
• To support investigations and corrective action / preventive action plans as a result of internal, external or customer audits

To improve efficiency and profitability we need to observe the effect  identify the root cause and craft a preventative solution to resolve and prevent reoccurrence with the by-product of savings and efficiency

Most key occurrences of identified problems or non-conformance fall into one of the four categories below:

1.  People; Includes training, supervision, communication, management of change, contractor safety, etc
2. Methods; this includes risk assessments, procedures and safe working practices, design, safety, and review, inspections, quality control, etc
3. Environments; this includes machines, equipment, and tools, etc 
4. Materials; for example faulty supplier, incorrect material, etc.
    

It is important to select the correct individual / team to manage an RCA. All team members are required to have knowledge of the activity and process being managed to understand the impact of variables i.e., how, why, when, etc.

1. Awareness of casual relationships of variables
2. The problem and solution may not be immediately obvious and care to be given to avoid premature conclusions / solutions limit
3. Suggestions / corrective action that is actionable
4. Document RCA analysis and conclusions 

Be sure to use the Root Cause Analysis Template to assist in the Root Cause process and problem resolution

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2. Useful Links

Security Services

Conducing Root Cause Analysis (RCA)

Transition

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SS-051 Ver 1.0 (May 23)

5 Key Step Process

1.   Define the problem

• What do you see happening?
• What are the specific symptoms?

2.   Collect Data

• What proof do you have that the problem exists?
• How long has the problem existed?
• What is the impact of the problem?

The current situation should be fully assessed before reviewing the factors that contributed to the problem occurring

3.   Identify possible factors that caused the problem

• What sequence of events leads to the problem?
• What conditions allowed the problem to occur?
• What other variables may be a part of the core concern?

  Identify as many causal factors as possible.  Don’t treat the obvious causes.

Tools to identify the causal factors:

• Appreciation – use the facts and ask yourself “so what”. This will help you to identify and determine all possible consequences of the act
  
• 5 Whys – ask “why?” (At least 5 times) until you get to the root cause of the problem
  
• Drill Down – Break-down the problem into small variables to better understand the larger picture
  
• Cause and effect diagrams – create a chart which shows all possible causal factors. This may help in identifying where the problem has begun
  
  

4.   Identify the Root Cause

• Why does the causal factor exist?
• What is the real reason the problem occurred?

Use the same tools as you have used to identify the causal factors (above)

5.   Recommend and implement solutions

• What can be done to prevent the problem from happening again?
• How will the solution be implemented (what resources and changes are required, what is the timing)?
• Who will be responsible for it?
• What are the risks of implementing the solution?

RCA Flowchart

Useful Link to Supplier PEP Program

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5. Useful Links

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Root Cause Analysis - 5 Step process

Transition

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SS-051 Ver 1.0 (May 23)

Supplier partner

Performance Improvement Process (PIP)

Is...

1. A strategic Supplier partner level corrective action process
2. Defined service improvement objectives and timelines
3. Championed by supply chain leadership, but managed by the supplier partner
4. An objective measurement of Supplier partner improvement resulting in sustainable service quality
5. Regular cadence of reviews to discuss supplier partner progress to plan
6. A final disposition of Supplier partner performance used to determine supplier’s status with CBRE
7. A process that can be launched at the account level or central operations support team

Is NOT...

1. A day-to-day Supplier partner quality management process
2. An emotionally driven process
3. A tool to beat-down Supplier partners into conformance
4. A process that has no end or result
5. Measured by subjective data

(Refer to Page 5 for Next Steps to be followed)

Responsibility

Performance:   Account Teams

KPI's Source:   Supplier partner

Responsibility

Account team Procurement Leader

Country Lead

Procurement Platform Lead, or Divisional Procurement Lead

Responsibility

Supplier Partner supported by appropriate CBRE team

Responsibility

KPI Source:   Supplier partner

Performance:   Account teams

Refine corrective action:  CBRE 

Responsibility

KPI Source:   Supplier partner

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

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Useful Links

Security Services

Supplier Performance Improvement Process (PIP)

Transition

Page 4 of  5

1. Review Objective evidence of poor performance over time including prior Corrective Action efforts

2. Identify and document improvement Objectives, desired outcomes and Timing

3. Identify Key Stakeholders which include the Supplier partner

4. Identify Performance Improvement Team and Team Champions

5. Gain sponsorship and approval from Supply Chain key Stakeholders to launch a 90 day PIP

6. Complete a Charter to communicate the PIP Objectives, timing, support, tools and outcomes

7. Communicate the launch of the 90 day PIP and explain the overall process

8. Schedule meetings with all Stakeholders to launch the PIP

10. Supplier partner to create a progress Dashboard that communicates the overall improvement status

9. Request Supplier partner to initiate the 90 day PIP

11. Communicate agreement on timing, reporting and expected outcomes to all

12. Plan for final review after 90 days and any next steps

SS-051 Ver 1.0 (May 23)

Next Steps- Implementing the PIP

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Security Services

Performance Improvement Process Steps

Transition

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