What are performance metrics and why should they be added to the contract?
Performance metrics are inserted in a contract in order to continually measure the performance of the OEM Supplier against the requirements set forth in the contract. These metrics provide for penalties if they are not met. For example, failure to ensure that requests from an organization to an OEM are processed and responded to in an expedient manner can hurt not only the communication channels between the two parties, but the ability of an organization to capitalize on opportunity. The utilization of performance metrics that are stated in the contract and penalize the OEM for failure to comply in a timely manner ensures that the communication channels and opportunity flexibility of the organization remain in a strong position.
