Designing a Supplier Performance Measurement System for a Global Industrial Company: A Case Study at Sandvik Rock Processing AB

Abstract

Supplier performance has become increasingly important for industrial companies as suppliers play
acriticalroleinoperationalefficiency,deliveryreliability,andlong-termcompetitiveness. Despite
this, many organizations still lack structured systems for evaluating and monitoring supplier per-
formance. This thesis addresses this challenge through a case study conducted at Sandvik Rock
Processing, where the purchasing unit identified the need for a more standardized and transparent
approach to supplier evaluation. The purpose of the study was to develop a Supplier Performance
Measurement System (SPMS) tailored to the operational needs of the company. The system was
designed to evaluate, compare, and classify suppliers based on multiple operational criteria. The
studyfollowedamixed-methodsresearchdesignwithapragmaticandabductiveresearchapproach.
Data was collected through a literature review, semi-structured interviews, surveys, and internal
company data. Existing theory on supplier management, performance measurement systems, and
supplier evaluation methods formed the theoretical foundation of the study.

The findings show that operational supplier performance cannot be evaluated solely through tradi-
tional criteria such as quality and delivery. Instead, additional dimensions including flexibility and
communication were identified as important for supplier evaluation within the case company con-
text. To determine the relative importance of the criteria and subcriteria, the Analytical Hierarchy
Process (AHP) was applied using survey responses from purchasing professionals at the company.
Benchmarking values were established through a combination of literature findings and internal
supplier performance data.

The result of the thesis is a fully developed SPMS implemented in Excel, capable of ranking
and classifying suppliers into different performance categories. The system increases supplier
transparency, supports more data-driven decision-making, and reduces dependency on individual
purchaser experience. Furthermore, the study contributes to existing research by demonstrating
how an SPMS can be adapted to the operational realities and strategic priorities of a large industrial
company. The thesis concludes that a well-designed SPMS can support supplier development,
improve supplier relationship management, and strengthen operational purchasing activities when
aligned with organizational goals and continuously reviewed over time. This thesis has been a
completecollaborationbetweenthetwoauthors. Eachauthorhasbeeninvolvedineverypartofthe
processand contributed equally.

Popular Abstract

From Gut Feeling to Data: How Companies Can Identify Their Best Suppliers
What happens if a company’s most important supplier suddenly starts delivering late or with inadequate quality? For many industrial companies, the consequences can be significant: delays, increased costs, and dissatisfied customers. Despite this, supplier evaluations are often based on individual employees’ experiences rather than on shared and systematic data.

• author: Hamner, Alva and Jacobson, Josefine
• supervisor: Eva Berg
• organization: Production Management; Engineering Logistics
• course: MTTM05 20261
• year: 2026
• type: H2 - Master's Degree (Two Years)
• subject: Technology and Engineering
• keywords: Supplier performance measurement system (SPMS), supplier evaluation, analytical hierarchy process (AHP), performance criteria, supplier classification, purchasing, benchmarking
• other publication id: 6058
• language: English
• id: 9235727
• date added to LUP: 2026-06-11 14:59:17
• date last changed: 2026-06-11 14:59:17