Supplier SLA checklist

Who this is for

Founder led lower-middle market companies with 5 to 50 million in annual revenue that want reliable supply.

The quick answer

Set on time in full, lead time, quality measures, and communication rules. Include corrective action timing, price adjustment rules, data sharing, and review cadence. Use simple tiers so critical suppliers carry higher targets and faster response. Add remedies that focus on fixing causes first. Hold a quarterly review and share your demand plan.

The method in six parts

Core service targets
On time in full, committed lead time, minimum order size, and emergency expedite rules.
Quality measures
Incoming defects per million, warranty returns, and containment response.
Communication rules
Order confirmations within a set time, shipment notices, and a named contact list for escalations.
Corrective action and pricing
Root cause timing, corrective action reports, and fair rules for price changes tied to input indexes.
Data sharing and systems
Forecast format, inventory visibility where relevant, and basic EDI or portal use if needed.
Governance
Quarterly reviews, a scorecard, and a tier system so critical suppliers carry higher targets.

Example

A distributor added a simple SLA with two critical suppliers. On time in full rose and urgent expediting fell because communication and lead times were clear.

Pitfalls and fixes

Overly complex legal language. Keep it practical and measurable.
Same targets for every supplier. Use tiers by criticality.
Reviews that never happen. Book the dates and share the scorecard.

Checklist

Draft SLA with measurable targets
Tiered targets by supplier criticality
Contacts and communication rules
Corrective action and price rules
Quarterly review schedule and scorecard