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

Sammanfattning

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.