CMMI V3.0 Domains: The 'Suppliers' Domain

In this post we look at the ‘Supplier Management’ domain, one of the 8 specialist interest domains in the latest version of the Capability Maturity Model Integration (CMMI®). These domains extend the best practice in the core elements of the model by providing additional practices that are specifically related to an area of particular interest – in this case the area of Supplier management.

This post outlines the Suppliers domain and discusses the business value that this domain can deliver to an organization.

Supplier Management practices have been an intrinsic part of the CMMI since it was first released in 2002, and since that first incarnation, it has undergone a number of changes and adjustments, both structural (in terms of how the supplier management practices are represented in the model) and content related (in terms of the detail of the specific practices that relate to this area).

In the latest version of CMMI (V3.0), the issue of supplier management has been split out into a separate domain – one of 8 such constructs that now exists in the CMMI and which provides specialist practices that relate to a specific area of interest.

Supported by the 17 ‘Core’ practice areas which provide practices that apply across all domains, the Supplier domain extends the CMMI through the addition of a practice area called ‘Supplier Agreement Management’ (or SAM for short).

The Supplier Agreement Management practice area outlines practices which support both the selection of qualified suppliers and their subsequent management. The emphasis of this practice area is on the establishing of a working arrangement which is mutually beneficial to both parties and clearly defined and managed to avoid misunderstandings.

Supplier Agreement Management (as the name suggests) is governed by an agreement (usually a formal contractual agreement) between the supplier and the acquirer organization. Supplier selection activities are focused on choosing the most appropriate supplier and establishing an agreement with them; supplier management activities are then concerned with ensuring that the terms of the agreement have been satisfied by both parties and lead to a satisfactory outcome.

Supplier selection practices are intended to ensure that the most qualified suppliers are selected based on an evaluation of their responses to the acquirer’s stated needs. At the lower levels of capability, this may be just an ad-hoc evaluation of the responses provided through the supplier request process (e.g. RFP/RFQs etc).

As you progress up through the different levels of capability, the practices become more objective, specific and focused on a typical criteria-based evaluation of potential suppliers in which, the optimum supplier is chosen through an evaluation of their responses based on predefined evaluation criteria.

Once a supplier has been selected, and a formal agreement exists between the two parties which clearly outlines the scope of supply, quality criteria to be applied and the various obligations of both parties to each other, the SAM practices then outline best practice approaches for managing that relationship and ensuring that both parties fulfil the terms of the agreement.

SAM provides a comprehensive set of practices covering acceptance of the supplied products and services, payment of supplier invoices and performing agreed quality assurance activities on the supplier’s work.

Due to commercial sensitivities and the need to observe local legislation governing contractual relationships, Supplier Management is generally a highly regulated activity and the practices of SAM encapsulate the provisions which might normally be expected to be relevant in such a relationship.

If you wish to learn more about the Supplier Management Domain, or if you are intending to be part of an appraisal team looking at it, the new Building Organizational Capability (BOC) course covers this, along with the other 7 specialist domains and is the only course that qualifies you for service on a CMMI Appraisal covering the Supplier Domain.

For more information on the BOC course or to sign up to one of our classes, visit:

https://www.casmarantraining.com/product-page/building-organizational-capability-online

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