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"The Point" is written by BMP Editor Kelly Barner as well as a diverse group of guest contributors.

Are Suppliers Faceless Entities?

Are Suppliers Faceless Entities?

The term supplier is banded around with such ease, yet has it devalued the relationship and removed the individual, resulting in generic and stale business relationships?

The supplier

The associated business activity of a supplier is simple enough: the supplier delivers goods/services to the buyer in order to fulfil a contractual requirement. However, the challenge is that the term can also be used in many other ways. For example:

  • It can be used as an excuse to blame poorly structured contracts. “The supplier didn’t agree”

  • It can be used to justify the buyer not doing something they don’t want to do “the supplier didn’t support it”

In essence the word “supplier” is used as a generic label to cover all and any activity between the buyer and their supply chain.

Labels

Society has a habit of labelling many areas of the world we live in, ranging from how one’s spouse might be identified “The wife/husband” through to labelling social, economic, political, regional, and religious groups.

When a label is used it can de-humanise the individual. Sometimes this is a deliberate approach to make it easier to talk about a wider group, however when used incorrectly it can also have a detrimental effect on how the individual identifies their value and how others evaluate their contribution.

Human relationships are behind all commercial contracts, and so de-humanising the relationship may feel like a convenient model for addressing multiple aspects but one needs to question if it will really drive the best out of the relationship.

Who Cares?

When we look at the relationship between the buying organisation and their supply chain, we see a trend. Suppliers who are valued are rarely labelled as “the supplier” but are identified by either the company name or account team members. When this supplier is discussed internally, the ability to name the company/account team demonstrates to the business the value placed upon the relationship.  This has a knock on effect within both organisations, a greater focus placed on the human relationships creates a stronger desire to accommodate and collaborate.

With more and more automation being introduced into the procurement processes, it has the capability to remove the human relationship aspect of doing business. Now more than ever one needs to focus on how labels are applied within business.

Collaboration

Collaboration remains an undeveloped area of business opportunity, with few organisations able to say they collaborate with their entire supply base. Collaboration can take many forms but they all require a human desire to want to engage. The level of support buying organisations can generate from their supply chain may be directly influenced by how the supply chain has been labelled.

The future

The next time you discuss “the supplier” you may want to reflect if it is being used to truly reflect the larger community or to cover up other underlying issues. It is human nature to blame a faceless entity when convenient such as “The Business believes XXXX,” however to get the most out of others you need to respect who they are and what they bring to the relationship.

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Book Review: The POD Model

Book Review: The POD Model

Buyers and suppliers, they make the commercial world go round.

-        The POD Model, p. 1

 

The POD Model: The mutually-beneficial model for buyers and suppliers which enables an increase in profit through commercial collaboration by Michael Robertson strives to do something that we need a whole lot more of in procurement. It provides a framework for combining our philosophical objectives as collaborators and innovators with the inescapable need to measure our results.

Robertson looks at the messy reality of buyer supplier relations and breaks them down to a few major issues: cost, risk, flexibility, and incentives for mutual gain. He then looks to find a way to factor those into contracts in such a way that no one party benefits at the cost or loss of the other.

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ISM-New York Takes on Procurement2020 with their Annual Conference

ISM-New York Takes on Procurement2020 with their Annual Conference

I had a unique opportunity yesterday to serve as the Q&A facilitator for ISM-New York’s annual meeting. What is so unique about that? I did it from Central Massachusetts! Through the magic of Google Hangouts (and with a little help from an eight hour phone call) I saw, heard, and interacted with the speakers and attendees in a meeting room overlooking Times Square.

Kudos to ISM-New York President Nancy Murray, Executive Director Julienne Ryan, and former Vice President Jim Martin for their adventurous, virtual approach to collaboration and networking.

 

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Best Procurement and Supply Chain Webinars 3/7-11

Best Procurement and Supply Chain Webinars 3/7-11

It’s a busy week in procurement with eight webinars on the calendar. I’m recommending two about intelligence and a third about the strategic positioning of suppliers. Click on the title of each event below to view the full description in our events calendar and to connect to their registration pages.

 

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Best Procurement and Supply Chain Webinars 2/22 - 26

Best Procurement and Supply Chain Webinars 2/22 - 26

We have another ProcureCon event running this week – this time in Orlando, FL. For anyone not traveling to the Sunshine State, there are a full DOZEN webinars being held, half of which are on Thursday. I’ve recommended four below and provided my reasoning. Click on the title of each event below to view the full description in our events calendar and to connect to their registration pages.

 

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Let's End the Buyer-Supplier Negotiation Countertactics Spiral

Let's End the Buyer-Supplier Negotiation Countertactics Spiral

This post was originally featured on Design News.

Every interaction a company has with its suppliers can set off an endless series of tactics and countertactics. It's like a wrestling match. Both sides invest so much time and effort in trying to anticipate the next steps by the other that the focus is turned away from the best interests of their organizations. This comes especially true during the negotiation phase of the procurement process.

Negotiations between buyers and suppliers have traditionally assumed a zero-sum outcome: Each party does not benefit except at the expense of the other. The end result of this tactic/countertactics spiral is a combination of inefficient decision-making, obscured visibility, and contentious working relationships. 

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Making the Case for a More Diverse Supply Chain Part II – Supplier Evaluation

Making the Case for a More Diverse Supply Chain Part II – Supplier Evaluation

In the first part of this two-part series, I established the reasoning behind establishing a diverse supply chain in the nontraditional sense. Emphasis on maintaining a supply chain that is diverse in geographical location, capabilities, and overall corporate values is vital in maintaining supply chain resiliency, sustainability, and adaptability.  To achieve a supplier mix that fits these goals, the right questions must be asked during an internal supplier rationalization process, overtaking the traditional values of an RFx.

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Making the Case for a More Diverse Supply Chain

Making the Case for a More Diverse Supply Chain

Supplier diversity is a concept with multiple definitions.  Most commonly, a supplier diversity program focuses on the utilization of women owned, minority owned, and else certified diverse businesses within your supply base.  There is, however, another interpretation of supplier diversity – a diversity of geographical location, sourcing practices, and overall organizational structure.  Evaluating these factors in a meaningful way when evaluating suppliers can be an important factor in managing supply chain resiliency, sustainability, and adaptability.

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How to Successfully Break-Up With Your Incumbent Supplier

How to Successfully Break-Up With Your Incumbent Supplier

Anyone who has ever completed a Request for Proposal (RFP) has had the unfortunate experience of informing all but one or two suppliers they have not been awarded the business.  It may be difficult and at times uncomfortable, but when the unchosen supplier is the incumbent, there is more to manage than just this conversation.  How this transition process is handled can either help or hinder the success of moving to a new supplier relationship. There are a few steps you can take to smooth the transition and ensure all parties are as satisfied as possible.

Recent comment in this post
Guest — Alun@marketdojo
Great article. We have found that far too many eAuction negotiations end up with the incumbent even though they dont end up in fir... Read More
Thursday, 10 December 2015 04:32
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Best Procurement and Supply Chain Webinars 10/19 – 10/23: Social Media, the Digital Pivot, and Supplier Centricity

Best Procurement and Supply Chain Webinars 10/19 – 10/23: Social Media, the Digital Pivot, and Supplier Centricity

This week is ridiculously busy – there are 15 webinars taking place: five on Tuesday, one on Wednesday, and NINE on Thursday. Given the wide range of choices, it wasn’t easy to pick the best ones, but my recommendations are below. Click on the title of each event below to view the full description in our events calendar and to connect to their registration pages.

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Guest Post on Design News: Should Approved Vendor Lists Be More in Line with Design Cycles?

Guest Post on Design News: Should Approved Vendor Lists Be More in Line with Design Cycles?

According to joint research done by Design News and Exploration and Insights in 2014, 67% of companies have design cycles of 3-12 months. The remaining 33% of survey participants are almost evenly divided between design cycles requiring longer than a year and those taking less than three months. Regardless of their length, we can be sure all of those teams are looking for ways to shorten them, without sacrificing quality or functionality, so that they can be first to market and get the greater share of customers.

CLICK HERE TO READ THIS POST ON DESIGN NEWS

While the need to speed up design cycles is top of mind today, it is not a new initiative. In fact, 20 years ago, Design News published what you might call a “multi-generational design engineering retrospective.” As stated in “Engineering Megatrends,” published on Aug. 28, 1995, “Since the first caveman decided to capitalize on his best idea for a new club, businesses have operated on the principle that the first to get to market owns the market — at least for awhile.” With increased competition from all corners of the globe, and the nearly universal consumer fascination with having the latest, most innovative products, cutting time to market is now a critical element of competitive advantage.”

Despite this pervasive emphasis on “faster, sooner, better,” the same organizations that have multiple design cycles a year only update their approved vendor lists (AVLs) on an annual basis.

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The Good, the Bad, and the Ugly of the CEO Pay Ratio

The Good, the Bad, and the Ugly of the CEO Pay Ratio

In August the SEC adopted a measure that will require public companies to publish a CEO pay ratio in their financial statements. The ratio, which compares median worker pay to the CEO’s salary, is a provision of the 2010 Dodd-Frank act and it takes effect in January 2017.

Some of the early, albeit unofficial, CEO pay ratios seem to demonstrate an enormous pay disparity between the leadership and workers in a company. In other cases, it calls attention to CEOs with strikingly low compensation for the position they hold. For instance, Apple’s Tim Cook has a CEO pay ratio of 43:1, Ford’s Alan Mulally has a 113:1, and Goodyear’s Richard Kramer has a whopping 323:1 ratio. IBM and Intel have ratios of 25:1 and 30:1 respectively.

Any time procurement is evaluating a publicly traded company, we naturally make use of their financial statements and annual reports, which are valuable sources of information. But is this new ratio relevant to the evaluation of a supplier for financial stability, risk, and collaborative potential? Should procurement take this information into consideration when ranking and selecting suppliers?

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Procurement Perspectives Podcast: Trusting Internal Team Members and What That Should Teach Us About Supplier Partnerships

Procurement Perspectives Podcast: Trusting Internal Team Members and What That Should Teach Us About Supplier Partnerships

This week our audio comes from Acquire Procurement Services, a consultancy based in Australia specializing in establishing and re-negotiating contracts across sectors. Their video is titled 'Why do we treat employees and suppliers differently?' and is available on their YouTube channel. In it, they draw a contrast between the information companies share with their employees and how they handle sharing with suppliers who might perform the same or similar functions on their behalf.

You can listen to the podcast on the PI Window on Business Blog Talk Radio channel or on our Sound Cloud page.

 

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Guest Post on the Social Contracting Blog: Contract Management: Yours, Mine, and Ours

Guest Post on the Social Contracting Blog: Contract Management: Yours, Mine, and Ours

In his recent book Global Supply Chain Ecosystems, Mark Millar wrote, "…today's supply chains encompass complex webs of interdependencies, frequently spanning the globe, designed and deployed to optimize critical attributes – such as speed, agility, and resilience – that drive competitive advantage."

His point plays out on a daily basis through the contract management strategies and practices in many organizations. Because our supply chains are no longer linear or consecutive, we may be buying from and selling to the same company at the same time. This puts our organization in the role of being simultaneously both buyer and supplier.

While there is no problem with this, it does raise complexities for the procurement and sales teams if one or the other is unaware of something going on. I can honestly say I have seen this happen firsthand.

CLICK HERE TO READ THE REST OF THIS POST ON THE SOCIAL CONTRACTING BLOG

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New Research Reveals Consumer Expectations for Supplier Management

New Research Reveals Consumer Expectations for Supplier Management

Late last week, Proxima Group revealed the initial findings of research they commissioned into how consumers – American consumers specifically, feel about companies that find themselves on the wrong end of a supplier scandal.

According to the release, “The study of typical American consumers, commissioned by sourcing and procurement specialist Proxima, reveals that 74% of respondents stated they would be unlikely to buy products or services from a company involved in controversial supplier practices. Furthermore, nearly 66% would stop giving such a company their business even if that company was the most convenient and cheapest option.”

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Webinar Notes: Why Vendor Management Must Change: 3 Most Common Dysfunctional Aspects of the Current Model

Webinar Notes: Why Vendor Management Must Change: 3 Most Common Dysfunctional Aspects of the Current Model

This week’s webinar notes are from a March 25th webinar presented by the Outsourcing Institute and Alsbridge. This is too soon to expect the on demand version to be available (assuming it will be) but here is the link to the page where OI posts their on demand events. There was also talk of a whitepaper related to the webinar content, and I will post the link to that’s as soon as I am sure which one it is.

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Town Hall Notes: Designing a Meaningful Set of Performance Metrics for Every Contract

Town Hall Notes: Designing a Meaningful Set of Performance Metrics for Every Contract

This week’s event notes are from the September SIG Town Hall Teleconference. In this open mic event, Dawn Evans, SIG’s President and CEO, led a discussion about the metrics procurement can put in place to drive meaningful results from suppliers. These events, held monthly, are open to buy side members. SIG also welcomes first time buy-side non-members so they can experience the open nature of a SIG Town Hall Teleconference. These events are unsponsored and are never recorded in order to encourage open participation. For more information on SIG Town Halls, click here.

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Webinar Notes: Become a Procurement Change Agent

Webinar Notes: Become a Procurement Change Agent

This week’s webinar notes are based on a May 13th webinar presented by IASTA and Efficio, their European consulting partner. The event was recorded, and the on demand version is available on Slideshare. You can also download the presentation itself, which included quite a bit of data, directly from IASTA’s website.

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Webinar Notes: RAGE Frameworks Real Time Intelligence for Supplier Risk

Webinar Notes: RAGE Frameworks Real Time Intelligence for Supplier Risk

Editor's note: Buyers Meeting Point would like to thank partner and colleague Jeanette Jones of Cottrill Research for this week's webinar notes. The original posting can be viewed on the Cottrill blog. For our readers without a background in etymology or taxonomies, an ontology is the study of categories of bring as well as their interrelations. In a procurement context, this can most clearly be seen in spend analysis through the category structure and hierarchy used by the company to group and organize transactions.

 

There are many articles and reports about using Big Data for supplier risk, but there is still confusion about what Big Data is and how exactly one moves forward. Tom Fishburne at marketcartoonist.com succinctly sums it up with this gem, “many companies struggle with small data, let alone big data.”

 

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Webinar Notes: Improving Supplier Risk Management in the Age of Big Data

Webinar Notes: Improving Supplier Risk Management in the Age of Big Data

“Risk management is not a purchasing initiative. It’s an initiative and philosophy that has to be embraced by the entire organization.”

-- Rose Kelly-Falls Senior VP Supply Chain Risk, Rapid Ratings and event panelist

This week’s webinar notes are from a February 13th webinar hosted by IASTA and featuring a panel of speakers. An on demand version of the event is available on their website.

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