Monitoring helps management identify and assess progress, solve any implementation issues, and ensure that objectives are being met. Objectives should be measurable with key performance indicators (KPI). By monitoring the KPIs the organization can evaluate its success toward defined goals.
Ensure that you understand what is important to your organization to attain, and choose the associated performance indicators so that you can identify potential improvements. The balanced scorecard is a very common way to monitor performance. Your KPIs need to be linked to target values so that they can be assessed for meeting specific requirements.
Many organizations have software programs in place that provide improved insight into spending and efficiency, in order to stay in compliance with Sarbanes Oxley and prevent overspending. However, procurement needs to not only include this information but also continue to look at risk assessment tied to the product and the supplier, as well as seeking and evaluating alternative solutions.
Does monitoring include information related to the supplier's ongoing ability to meet contract requirements and a review of any deviation or nonperformance by the supplier? Do you monitor and have objective evidence related to the supplier's capability, quality assurance program implementation, performance, and necessary follow-up actions? How is this tracked and reported, and to whom? The goods and services may include ongoing management of a contract or the disposal of materials at the end of their life cycle, which also requires monitoring.
Many organizations outsource their supply chain logistics, which can have an impact on customer satisfaction. An organization needs to keep a close focus on quality control of this service regarding confidentiality requirements, conflicts of interest, compliance with legal requirements, delivery performance, customer service, budgeting, and reporting of all procurement requirements to key stakeholders.
Monitoring quality performance of your key suppliers is important regarding global supply of materials and outsourcing of processes. Records of the results of supply chain evaluations and any necessary actions should be kept.