Contract Manufacturer Evaluations

Hammering in a nail with a screwdriver

Even the best tools are ineffectual if they are used improperly or simply lay about gathering dust. Likewise, performance evaluations are too frequently underrated, underused or misunderstood by manufacturers who:

Evaluations in 4 easy steps

Granted, evaluations take work, but everything has a starting point. The starting point for performance evaluations is answering four questions:

Answers will vary somewhat from manufacturer to manufacturer (depending on everything from business goals to performance to company culture) and even from project to project.

What do you care about?

Before you can measure success, you need to know what success looks like. If your team is not aligned or, worse still, you are not crystal clear on your own expectations, even the best intentions and hardest work can produce catastrophic results. Think of it as everyone jumping into their cars and driving at full speed…to different destinations.Here are a few tips to prevent that from happening.

1. Start with the basic project requirements: cost, quality, delivery timelines, technical capabilities, etc.
2. Include requirements that will work towards your strategic goals. For example, how well your CM works with your teams.
3. Don’t force your CM to give equal attention to dozens of demands when you need them to focus on a critical subset.
4. Write them down. Make certain everyone involved understands what you care about.

How will it be measured?

The second step to defining success is to remove all subjectivity from individual requirements. There is little point in telling four people you expect “high quality” if each one has their own definitions of “high” and “quality”.

Metrics – assigning numerical values to your goals – are a fair and effective way to register performance. For example, one metric for quality might be the number of rejected or returned devices per batch.Assigning helpful metrics or key performance indicators (KPIs) could fill its own blog. However, the following tips will keep you from making costly mistakes:

1. Formalize your KPIs by putting them in your contract, SLAs, etc. and have your CM sign off on them.
2. Use metrics for prioritized ‘soft’ goals as well. Too many companies ignore vital strategic requirements simply because “good service” or “good working relationship with team” feels innately subjective. However, there are still fair ways to measure these. For example, if your CM takes more than 48 hours to respond to your messages or complaints from your team are way above an acceptable monthly threshold.
3. Ensure the goals you set are reasonable. For instance, evaluating your CM on whether they can meet impossible deadlines sets them for failure and damage both of you in the long term.

When, how and to whom will you communicate results?

There is little point to keeping any findings to yourself; you have to let your CM know how well (or badly) they’ve met your expectations.The ‘when’ can vary. Generally, a new CM may require more frequent feedback as you both find your collaborative groove. As for the ‘how’:

1. Go over the goals you both agreed upon, using your objective metrics to score performance.
2. Make it a conversation – you are building a partnership, not grading a student.
3. Remember that the point of an evaluation is continuous improvement, whether it’s fixing issues or building strengths.
4. Work together to form a detailed, going-forward plan.
5. Put the plan in writing, making updates to your contract if necessary.

How will you guide your CM to do better?

Communication is key to any relationship and critical to a successful manufacturer-CM partnership. Without clear and frequent communication, you open yourself to a number of risks, from delayed reactions to delaying actions based on misunderstanding.Lead by example and guide for growth by:

1. Ensuring that the going-forward plan is detailed and crystal clear.
2. That all areas of concern have deadlines for the desired outcomes.
3. Including frequent checkpoints to track progress across KPIs & expectations and, if necessary, correct direction sooner rather than later.
4. Establishing clear communication standards to ensure updates are shared across all stakeholder levels and disciplines.

Final Word

Evaluations are keys to a better future; ways to reap even greater rewards from your working relationship. A CM determined to do their best for you,  proactively provides updates, requests feedback and welcomes formal evaluations as an opportunity to continuously level up.

Curious about the steps Providence takes to ace its evaluations? Contact us to find out more.

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