Integrated Supplier Management (ISM)  Category: Project Management

Notes:

·        The contents of this web page were extracted from the following document: Capability Maturity Model® Integration (CMMISM), Version 1.1, Continuous Representation, CMU/SEI-2002-TR-011, March 2002 (CMMI-SE/SW/IPPD/SS). Copyright 2002 by Carnegie Mellon University. NO WARRANTY.

·        Ignore the identifiers in square brackets that appear at the end of paragraphs.

·        The formatting may not be the same as in the printed CMMI document. The web page is best viewed in Internet Explorer.

·        In the CMMI, a subset is known as a "Process Area (PA)" and a requirement is known as a "Practice". The specific practices are referred to as SPs and the generic practices are referred to as GPs.

·        This web page contains the text for SPs and GPs as it appears in Chapter 7 of the CMMI document, in the section corresponding to the process area named in the heading of this page. This web page does not include the detailed description of the GPs that appears in a separate chapter of the CMMI document; the detailed description of the GPs is available in a separate web page. (Note: Using the hyperlink provided here will open that web page in a separate window.)

Purpose   The purpose of Integrated Supplier Management is to proactively identify sources of products that may be used to satisfy the project’s requirements and to manage selected suppliers while maintaining a cooperative project-supplier relationship.  [PA168]

Introductory Notes  Integrated Supplier Management involves monitoring the new products available on the market, evaluating sources of products that might help satisfy project requirements, and using this information to select suppliers. Integrated Supplier Management also involves maintaining a cooperative project-supplier relationship, monitoring selected supplier processes, evaluating selected work products, and making appropriate adjustments in the supplier relationship and agreement.  [PA168.N101]

Integrated Supplier Management involves the following activities:  [PA168.N102]

·           Identifying, analyzing, and selecting potential sources of products

·           Evaluating and determining the sources to be used for acquiring products

·           Monitoring and analyzing selected supplier processes

·           Evaluating selected supplier work products

·           Revising the supplier agreement or relationship as appropriate

The Integrated Supplier Management process area builds on the concepts established in the Supplier Agreement Management process area by adding practices that emphasize a cooperative relationship with suppliers. Integrated Supplier Management is designed for situations in which projects use suppliers to perform functions that are critical to the success of the project. Analyzing sources and monitoring selected supplier processes and work products before delivery of the product to the project are two such functions described in this process area.  [PA168.N103]

The practices in Supplier Agreement Management, such as Select Suppliers, Establish Supplier Agreements, and Execute the Supplier Agreement, are critically tied to Integrated Supplier Management. Appropriate references are provided in both process areas to emphasize these relationships.  [PA168.N104]

Integrated Supplier Management emphasizes relationships with suppliers that are collaborative and coordinated. Projects evaluate the supplier’s performance and the quality of the work products for compliance with the requirements in the supplier agreement. Integrated Supplier Management is not required for projects using off-the-shelf items that are generally available and that are not modified in any way. There, the use of Supplier Agreement Management is sufficient.  [PA168.N105]

The term “source” refers to a potential supplier or suppliers before selection. (See the definition of “supplier” in Appendix C, the glossary.)  [PA168.N106]

See Chapter 3 for an explanation of how “product” is used in the CMMI Product Suite.  [PA168.N109]

The supplier agreement establishes the mechanism to allow the project to oversee supplier processes and work products and to evaluate any products being acquired. It also provides the vehicle for mutual understanding between the project and the supplier.  [PA168.N107]

The specific practices of this process area can be implemented either within each project, by a separate group in the organization that supports multiple projects (e.g., contract management), or some combination of the two.  [PA168.N108]

Refer to the Supplier Agreement Management process area for more information about establishing and maintaining agreements with suppliers.  [PA168.R101]

Refer to the Project Planning process area for more information about planning and managing the involvement of stakeholders.  [PA168.R102]

Refer to the Integrated Project Management for IPPD process area for more information about establishing and maintaining the project’s defined process and about implementing and managing integrated teams.  [PA168.R103]

Refer to the Risk Management process area for more information about managing risks.  [PA168.R104]

Refer to the Requirements Management process area for more information about managing requirements.  [PA168.R105]

Refer to the Requirements Development process area for more information about developing product and product-component requirements.  [PA168.R106]

Refer to the Technical Solution process area for more information about the products and product components to be acquired.  [PA168.R107]

Specific Goals

SG 1           Analyze and Select Sources of Products  [PA168.IG101]

                   Potential sources of products that best fit the needs of the project are identified, analyzed, and selected.

SG 2           Coordinate Work with Suppliers  [PA168.IG102]

                   Work is coordinated with suppliers to ensure the supplier agreement is executed appropriately.

Generic Goals

GG 1           Achieve Specific Goals   [CL102.GL101]

                   The process supports and enables achievement of the specific goals of the process area by transforming identifiable input work products to produce identifiable output work products.

GG 2           Institutionalize a Managed Process  [CL103.GL101]

                   The process is institutionalized as a managed process.

GG 3           Institutionalize a Defined Process  [CL104.GL101]

                   The process is institutionalized as a defined process.

GG 4           Institutionalize a Quantitatively Managed Process  [CL105.GL101]

                   The process is institutionalized as a quantitatively managed process.

GG 5           Institutionalize an Optimizing Process  [CL106.GL101]

                   The process is institutionalized as an optimizing process.

Practice-to-Goal Relationship Table

SG 1 Analyze and Select Sources of Products  [PA168.IG101]

SP 1.1-1      Analyze Potential Sources of Products

SP 1.2-1      Evaluate and Determine Sources of Products

SG 2 Coordinate Work with Suppliers  [PA168.IG102]

SP 2.1-1      Monitor Selected Supplier Processes

SP 2.2-1      Evaluate Selected Supplier Work Products

SP 2.3-1      Revise the Supplier Agreement or Relationship

GG 1 Achieve Specific Goals   [CL102.GL101]

GP 1.1        Perform Base Practices

GG 2 Institutionalize a Managed Process  [CL103.GL101]

GP 2.1        Establish an Organizational Policy

GP 2.2        Plan the Process

GP 2.3        Provide Resources

GP 2.4        Assign Responsibility

GP 2.5        Train People

GP 2.6        Manage Configurations

GP 2.7        Identify and Involve Relevant Stakeholders

GP 2.8        Monitor and Control the Process

GP 2.9        Objectively Evaluate Adherence

GP 2.10      Review Status with Higher Level Management

GG 3 Institutionalize a Defined Process  [CL104.GL101]

GP 3.1        Establish a Defined Process

GP 3.2        Collect Improvement Information

GG 4 Institutionalize a Quantitatively Managed Process  [CL105.GL101]

GP 4.1        Establish Quantitative Objectives for the Process

GP 4.2        Stabilize Subprocess Performance

GG 5 Institutionalize an Optimizing Process  [CL106.GL101]

GP 5.1        Ensure Continuous Process Improvement

GP 5.2        Correct Root Causes of Problems

Specific Practices by Goal

SG 1           Analyze and Select Sources of Products

                   Potential sources of products that best fit the needs of the project are identified, analyzed, and selected.  [PA168.IG101]

The specific practices associated with this specific goal enhance the approach to selecting suppliers described in the Supplier Agreement Management process area by proactively identifying potential sources of products that satisfy the project’s requirements and by using this information when selecting suppliers.  [PA168.IG101.N101]

The specific practices associated with this specific goal augment those that help achieve the Establish Supplier Agreements specific goal of the Supplier Agreement Management process area and contribute to making the supplier selection decisions described in that process area.  [PA168.IG101.N102]

SP 1.1-1      Analyze Potential Sources of Products

Identify and analyze potential sources of products that may be used to satisfy the project’s requirements.  [PA168.IG101.SP101]

Identifying sources of products that might be used to satisfy the project’s requirements involves monitoring the market to identify potential sources of such products. The products available in the market continually change, as does the information about the capabilities of products and their suppliers. Thus, new information that may be essential to deciding which potential sources are most effective continually becomes available. Monitoring the market to identify potential sources involves proactively searching for such information and incorporating it into ongoing and future decisions.  [PA168.IG101.SP101.N101]

Typical Work Products

1.    List of potential sources of products that might be acquired  [PA168.IG101.SP101.W101]

2.    Market studies  [PA168.IG101.SP101.W102]

3.    Trade studies  [PA168.IG101.SP101.W103]

4.    Information about potential sources such as past performance, post-delivery support, corporate viability, and risks  [PA168.IG101.SP101.W104]

Subpractices

1.    Conduct market research to identify potential sources of candidate products to be acquired, including candidates from suppliers of custom-made products and vendors of COTS products.  [PA168.IG101.SP101.SubP101]

Refer to the Organizational Innovation and Deployment process area for examples of sources of process and technology improvements and how to pilot and evaluate such improvements.  [PA168.IG101.SP101.SubP101.R101]

2.    Evaluate potential sources against established criteria by performing trade studies, as appropriate.  [PA168.IG101.SP101.SubP102]

The purpose of evaluating sources is to achieve a better understanding of the relative merits of alternative sources in terms of their potential to satisfy project requirements.  [PA168.IG101.SP101.SubP102.N101]

3.    Identify risks associated with the potential sources.  [PA168.IG101.SP101.SubP103]

SP 1.2-1      Evaluate and Determine Sources of Products

Use a formal evaluation process to determine which sources of custom-made and off-the-shelf products to use.  [PA168.IG101.SP102]

Factors that may affect the evaluation include the following:  [PA168.IG101.SP102.N101]

·           Core competencies

·           Functions the products will provide and how these functions relate to customer needs

·           Availability of on-site support such as responses to queries and problem reports

·           Availability of maintenance support after delivery

·           Availability of project resources and skills

·           Ability to commit to critical delivery and integration dates

·           Skills and capabilities

·           Licenses, warranties, responsibilities, and limitations associated with the products

·           Results of cost-to-benefit ratio analyses, as appropriate

Refer to the Decision Analysis and Resolution process area for more information about formal evaluation approaches that can be used to select suppliers.  [PA168.IG101.SP102.N101.R101]

Typical Work Products

1.    Analysis and evaluation reports  [PA168.IG101.SP102.W101]

2.    Revised list of product sources  [PA168.IG101.SP102.W102]

Subpractices

1.    Determine the feasibility of acquiring custom-made or off-the-shelf products.  [PA168.IG101.SP102.SubP101]

2.    Determine product life-cycle costs of custom-made or off-the-shelf products.  [PA168.IG101.SP102.SubP102]

3.    Use the results of these analyses to select a supplier.  [PA168.IG101.SP102.SubP103]

Refer to the Select Suppliers specific practice of the Supplier Agreement Management process area for more information about selecting suppliers.  [PA168.IG101.SP102.SubP103.R101]

SG 2           Coordinate Work with Suppliers

                   Work is coordinated with suppliers to ensure the supplier agreement is executed appropriately.  [PA168.IG102]

The relationship that exists among the project, supplier, customer, and end user requires special emphasis.  [PA168.IG102.N101]

Achieving project success increasingly demands closely aligned, if not integrated, processes across organizational boundaries. The specific practices associated with this specific goal augment those that help achieve the Satisfy Supplier Agreements specific goal of the Supplier Agreement Management process area.  [PA168.IG102.N102]

SP 2.1-1      Monitor Selected Supplier Processes

Monitor and analyze selected processes used by the supplier.  [PA168.IG102.SP101]

In situations where there must be tight alignment between some of the processes implemented by the supplier and those of the project, monitoring these processes will help prevent interface problems.  [PA168.IG102.SP101.N101]

The processes selected for monitoring should include engineering, project management (including contracting), and support processes critical to successful project performance.  [PA168.IG102.SP101.N102]

Monitoring, if not performed with adequate care, can at one extreme be invasive and burdensome, or at the other extreme be uninformative and ineffective. There should be sufficient monitoring to detect issues as early as possible that may affect the supplier’s ability to satisfy the requirements of the supplier agreement.  [PA168.IG102.SP101.N103]

Analyzing selected processes involves taking the data obtained from monitoring selected supplier processes and analyzing it to determine whether there are serious issues.  [PA168.IG102.SP101.N104]

Typical Work Products

1.    List of processes selected for monitoring  [PA168.IG102.SP101.W101]

2.    Activity reports  [PA168.IG102.SP101.W102]

3.    Performance reports  [PA168.IG102.SP101.W103]

4.    Performance curves  [PA168.IG102.SP101.W104]

5.    Discrepancy reports  [PA168.IG102.SP101.W105]

Subpractices

1.    Identify the supplier processes that are critical to the success of the project.  [PA168.IG102.SP101.SubP101]

2.    Monitor the selected supplier’s processes for compliance with requirements of the agreement.  [PA168.IG102.SP101.SubP102]

3.    Analyze the results of monitoring the selected processes to detect issues as early as possible that may affect the supplier’s ability to satisfy the requirements of the agreement.  [PA168.IG102.SP101.SubP103]

Trend analysis can rely on internal and external data.  [PA168.IG102.SP101.SubP103.N101]

Refer to the Verification process area for more information about recording the results of verification and analyses.  [PA168.IG102.SP101.SubP103.N101.R101]

Refer to the Project Monitoring and Control process area for more information about taking corrective action.  [PA168.IG102.SP101.SubP103.N101.R102]

SP 2.2-1      Evaluate Selected Supplier Work Products

For custom-made products, evaluate selected supplier work products.  [PA168.IG102.SP102]

The scope of this specific practice is limited to suppliers providing the project with custom-made products. The intent of this specific practice is to evaluate selected work products produced by the supplier to help detect issues as early as possible that may affect the supplier’s ability to satisfy the requirements of the agreement. The work products selected for evaluation should include critical products, product components, and work products that provide insight into quality issues as early as possible.  [PA168.IG102.SP102.N101]

Typical Work Products

1.    List of work products selected for monitoring  [PA168.IG102.SP102.W101]

2.    Activity reports  [PA168.IG102.SP102.W102]

3.    Discrepancy reports  [PA168.IG102.SP102.W103]

Subpractices

1.    Identify those work products that are critical to the success of the project and that should be evaluated to help detect issues as early as possible that may affect the supplier’s ability to satisfy the requirements of the agreement.  [PA168.IG102.SP102.SubP101]

Examples of work products that may be critical to the success of the project may include:  [PA168.IG102.SP102.SubP101.N101]

·       Requirements

·       Architecture

·       Documentation

 

2.    Evaluate the selected work products.  [PA168.IG102.SP102.SubP102]

Work products are evaluated to ensure the following:  [PA168.IG102.SP102.SubP102.N101]

·       Derived requirements are traceable to higher level requirements.

·       The architecture is feasible and will satisfy future product growth and reuse needs.

·       Documentation that will be used to operate and support the product is adequate.

·       Work products are consistent with one another.

·       Products and product components (e.g., custom-made, off-the-shelf, and customer-supplied products) can be integrated.

3.    Determine and document actions needed to address deficiencies identified in the evaluations.  [PA168.IG102.SP102.SubP103]

Refer to the Project Monitoring and Control process area for more information about taking corrective action.  [PA168.IG102.SP102.SubP103.R101]

SP 2.3-1      Revise the Supplier Agreement or Relationship

Revise the supplier agreement or relationship, as appropriate, to reflect changes in conditions.  [PA168.IG102.SP103]

There are a number of conditions that occur throughout the life of the supplier agreement that warrant changing this agreement or changing the project’s relationship with the supplier. These conditions include changes in the business environment of the project or supplier; availability of new products in the market that can better satisfy the needs of the project; and deficiencies in supplier performance, project performance, or work product performance.  [PA168.IG102.SP103.N101]

When the level of risk associated with satisfying the supplier agreement increases significantly, the project may make changes to the supplier agreement or to the relationship with the supplier. When the supplier’s level of risk is low, the project should be careful not to impede the execution of the supplier’s processes. This situation may also warrant making changes to the supplier agreement to minimize intervention.  [PA168.IG102.SP103.N102]

Refer to the Establish Supplier Agreements specific practice of the Supplier Agreement Management process area for more information about establishing and maintaining formal agreements with the supplier.  [PA168.IG102.SP103.N102.R101]

Typical Work Products

1.    Revisions to the supplier agreement  [PA168.IG102.SP103.W101]

2.    Revisions to the project’s and supplier’s processes and work products  [PA168.IG102.SP103.W102]

Subpractices

1.    Review the supplier agreement to ensure it accurately reflects the project’s relationship with the supplier and current market conditions.  [PA168.IG102.SP103.SubP101]

2.    Revise the project’s defined process or work products as necessary to reflect changes in the project-supplier relationship.  [PA168.IG102.SP103.SubP102]

Refer to the Integrated Project Management for IPPD process area for more information about establishing and maintaining the project’s defined process.  [PA168.IG102.SP103.SubP102.R101]

3.    Ensure that the supplier’s processes or work products are revised as necessary to reflect changes in the project-supplier relationship.  [PA168.IG102.SP103.SubP103]

4.    Coordinate changes to the supplier agreement with the supplier to ensure that changes in the project-supplier relationship are understood by both the project and supplier.  [PA168.IG102.SP103.SubP104]

Make any adjustments that affect requirements in the supplier agreement through official channels.  [PA168.IG102.SP103.SubP104.N101]

5.    Adapt the supplier agreement or relationship to better match the supplier’s performance based on the results of risk evaluations.  [PA168.IG102.SP103.SubP105]

6.    Communicate to project members and other relevant stakeholders all changes to the supplier agreement and to the project-supplier relationship.  [PA168.IG102.SP103.SubP106]

Generic Practices by Goal

(Note: The detailed description of the GPs is available in a separate web page. Using the hyperlink provided here will open that web page in a separate window. However, the GP elaborations pertinent to the process area of this web page are available below.)

GG 1           Achieve Specific Goals

                   The process supports and enables achievement of the specific goals of the process area by transforming identifiable input work products to produce identifiable output work products.

GP 1.1        Perform Base Practices

Perform the base practices of the integrated supplier management process to develop work products and provide services to achieve the specific goals of the process area.  [GP102]

GG 2           Institutionalize a Managed Process

                   The process is institutionalized as a managed process.

GP 2.1        Establish an Organizational Policy

Establish and maintain an organizational policy for planning and performing the integrated supplier management process.  [GP103]

Elaboration:

This policy establishes organizational expectations for identifying, analyzing, and selecting suppliers; and for monitoring supplier processes, work products, and performance.  [PA168.EL101]

This policy also establishes organizational expectations for analyzing and managing risks relevant to potential sources and the project-supplier relationship.  [PA168.EL102]

GP 2.2        Plan the Process

Establish and maintain the plan for performing the integrated supplier management process.  [GP104]

Elaboration:

Typically, this plan for performing the integrated supplier management process is a part of the project plan as described in the Project Planning process area.  [PA168.EL103]

GP 2.3        Provide Resources

Provide adequate resources for performing the integrated supplier management process, developing the work products, and providing the services of the process.  [GP105]

Elaboration:

Special expertise may be required including the following:  [PA168.EL105]

·           Ability to evaluate potential sources and select suppliers

·           Knowledge of supplier management, including appraising a supplier's planning documents, processes, work products, and services

·           Knowledge of risk management

·           Knowledge of the domain of the product being acquired

·           Knowledge of current engineering processes, work products, verification methods, technology, costing methodologies, and tools

GP 2.4        Assign Responsibility

Assign responsibility and authority for performing the process, developing the work products, and providing the services of the integrated supplier management process.  [GP106]

GP 2.5        Train People

Train the people performing or supporting the integrated supplier management process as needed.  [GP107]

Elaboration:

Examples of training topics include the following:  [PA168.EL106]

·           Identifying potential sources for candidate products to be acquired

·           Acquisition feasibility and product life-cycle costs analysis

·           Evaluating supplier work products

·           Monitoring supplier processes

 

GP 2.6        Manage Configurations

Place designated work products of the integrated supplier management process under appropriate levels of configuration management.  [GP109]

Elaboration:

Examples of work products placed under configuration management include the following:  [PA168.EL107]

·           Results of the acquisition feasibility and product life-cycle costs analysis

·           Supplier agreements

·           Discrepancy reports

 

GP 2.7        Identify and Involve Relevant Stakeholders

Identify and involve the relevant stakeholders of the integrated supplier management process as planned.  [GP124]

Elaboration:

Examples of activities for stakeholder involvement include:  [PA168.EL108]

·           Resolving issues about the improvements to supplier agreements

·           Resolving issues about the meaning of the requirements to be fulfilled by the supplied products

·           Resolving issues about the reporting of performance data and handling of discrepancies

 

GP 2.8        Monitor and Control the Process

Monitor and control the integrated supplier management process against the plan for performing the process and take appropriate corrective action.  [GP110]

Elaboration:

Examples of measures used in monitoring and controlling include the following:  [PA168.EL109]

·           Effort expended to manage the evaluation of sources and selection of suppliers

·           Number of changes to the requirements in the supplier agreement

·           Number of documented commitments between the project and the supplier

·           Interface coordination issue trends (i.e., number identified and number closed)

·           Quality measures of the supplied products

 

GP 2.9        Objectively Evaluate Adherence

Objectively evaluate adherence of the integrated supplier management process against its process description, standards, and procedures, and address noncompliance.  [GP113]

Elaboration:

Examples of activities reviewed include the following:  [PA168.EL110]

·           Managing the evaluation of sources and selection of suppliers according to the project’s defined process

·           Collecting data and providing appropriate data to the organization’s measurement repository

·           Using the organization’s measurement repository to support management activities

·           Ensuring that appropriate project subgroups participate in technical activities

·           Identifying, negotiating, and tracking critical dependencies and commitments among the functions involved with the integrated supplier management process

·           Handling agreement-coordination issues

 

GP 2.10      Review Status with Higher Level Management

Review the activities, status, and results of the integrated supplier management process with higher level management and resolve issues.  [GP112]

GG 3           Institutionalize a Defined Process

                   The process is institutionalized as a defined process.

GP 3.1        Establish a Defined Process

Establish and maintain the description of a defined integrated supplier management process.  [GP114]

GP 3.2        Collect Improvement Information

Collect work products, measures, measurement results, and improvement information derived from planning and performing the integrated supplier management process to support the future use and improvement of the organization’s processes and process assets.  [GP117]

GG 4           Institutionalize a Quantitatively Managed Process

                   The process is institutionalized as a quantitatively managed process.

GP 4.1        Establish Quantitative Objectives for the Process

Establish and maintain quantitative objectives for the integrated supplier management process that address quality and process performance based on customer needs and business objectives.  [GP118]

GP 4.2        Stabilize Subprocess Performance

Stabilize the performance of one or more subprocesses to determine the ability of the integrated supplier management process to achieve the established quantitative quality and process-performance objectives.  [GP119]

GG 5           Institutionalize an Optimizing Process

                   The process is institutionalized as an optimizing process.

GP 5.1        Ensure Continuous Process Improvement

Ensure continuous improvement of the integrated supplier management process in fulfilling the relevant business objectives of the organization.  [GP125]

GP 5.2        Correct Root Causes of Problems

Identify and correct the root causes of defects and other problems in the integrated supplier management process.  [GP121]