The paper aims to emphasize on the impacts of the supplier development on reducing the defects in supplier quality for a food distribution small–medium sized enterprise (SME). An empirical study was conducted to measure the performance of the suppliers in three different key performance indicators of the outsourcing and supplier’s performance to arise the existing problems via information exchange, data collection and data analysis. It was found that supplier development through data and information exchange and better communication by any food distribution SME raises the problems more promptly. This can dramatically change the supplier’s behavior to improve the quality of the supplier’s service and products. It is suggested that more research is required to raise other key performance indicators and their related problems and to develop more improvement practices. Six sigma methodologies could be the potential good practices to be focused in future research studies. Supplier performance measurement, which encompasses data exchange and data collection, develops the systematic flow of information, which potentially improves the flow of goods and the whole food supply chain to address the final consumer satisfaction. The research took a novel approach in adopting some transport related key performance indicators of the food supply to the food distribution and retailing sector, which is almost a new approach in food industry.