Certification in Supplier Diversity Practice Exam

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What is a key component of a good supplier development program?

Clear communication of expectations
Recognition and rewards for outstanding program results
Strict adherence to existing suppliers only
Limiting supplier evaluations to annual reviews

The correct answer is: Recognition and rewards for outstanding program results

A key component of a good supplier development program is clear communication of expectations. This entails establishing a transparent dialogue between the buyer and the supplier regarding performance standards, goals, and the desired outcomes of the partnership. When expectations are communicated effectively, suppliers are better equipped to meet or exceed those expectations, fostering a positive and productive relationship. Recognition and rewards for outstanding program results, while important for motivation and reinforcing good performance, do not address the foundational aspect of how suppliers understand what is expected from them. This means that without clear communication, even the best rewards system might not yield effective improvements in supplier performance. Strict adherence to existing suppliers only would limit the potential for innovation and improvement that can be achieved through a broader range of sourcing options. Limiting supplier evaluations to annual reviews can result in missed opportunities for timely feedback and ongoing improvement, which are critical in a dynamic market environment. In summary, clear communication of expectations sets the stage for all other elements of a supplier development program and ensures that suppliers have the knowledge and framework necessary to succeed.