Definition
Management bandwidth is allocated by relationship slot (tactile/integration/strategy), with a 3x3 scorecard (quality/delivery/costs) to be assigned to vendors and a frequency review by slot is decided.
In detail
Supply Base Management (SBM) allocates management resources by relationship tier (tactical, integrated, strategic), uses a 3x3 scorecard (three items each for quality, delivery, and cost) to evaluate supplier performance, and determines audit frequency based on tier. It addresses how to manage suppliers differentially. Its division of labor with commodity management is: commodity management decides what to buy, while SBM decides how to manage the relationship. Outputs include supplier tiering tables, scorecards, and audit plans.
Example in practice
The procurement department classifies suppliers into three tiers: tactical, integrated, and strategic. For strategic suppliers, monthly on-site reviews are conducted using a 3x3 scorecard tracking quality, delivery, and cost; integrated suppliers are reviewed 2 to 4 times a year; tactical suppliers are reviewed once a year. When a strategic supplier's delivery score declined, it triggered an improvement plan, and the procurement team worked with the supplier to develop corrective actions. The final output is a supplier performance report that guides share allocation.