In 2015, MyPurchasingCenter talked to William Moore, Senior Vice President, Sales and Channel Development at SKF USA. Moore sees value in frank discussions between procurement and suppliers, especially of the practices procurement has in place to implement and measure results of new ideas submitted by suppliers.
Last week, I ‘worked the switchboard’ for an AOP Live session with Christopher Sawchuk from The Hackett Group and Vishal Patel at Ivalua. EPSNews did a fantastic write up on the event, and they captured the essence of the challenge procurement faces today in their very first sentence: “Disasters have a way of elevating procurement operations to saviors of the day, week or month. But once a crisis has passed, purchasing reverts back to its identity as a corporate cost center.” (Click here to read the rest of the article.)
This week’s webinar schedule is light compared to last week, but it is also something of an unofficial supplier celebration. Both events look at the positive opportunities procurement has at hand if we can strike the right balance of competition and collaboration with the supply base. Click on the title of each webinar below to view the full description and register.
BTW: If you haven’t already, sign up for our mailing list to be sure you get my weekly recommendations in your Inbox each Monday.
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 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.
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.
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 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 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.
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.
As a student in school, everyone would receive report cards on the same day. This happened 4 times a year. Next of course was the conversation with Mom and Dad. Sometimes it was good news and sometimes not so good.
We have just completed a series of articles and blogs on Supplier Performance Management. There are many components to a successful program. It is not just about scorecards!
Small businesses begin when we are very young, selling homemade crafts at a yard sale or perhaps a road side lemonade stand. I know we ended up drinking most of our product and making very little profit.
This week’s featured webinar was hosted by CombineNet: ‘2013 E-Sourcing Resolution: Create Win-Win Solutions with Suppliers’. The event is already available on demand on their website.
This week Zycus and Ardent Partners presented ‘Sourcing for Value: Using Non-Price Attributes to Find the Best Suppliers’. Historically, not making an award decision based predominantly on price has been a reason stakeholders give for not wanting to follow the strategic sourcing process. Today, procurement professionals and the technology they use are accustomed to incorporating quantitative and qualitative measures of value into optimization scenarios and award decisions.
Yogi Berra was a famous baseball player for the New York Yankees in the 1940's and '50's. He is famous for his quotes. One that comes to mind is: "If you don't know where you are going, you might wind up somewhere else" . That can certainly apply to procurement and supplier performance. If that is not measured and reviewed, how do you know if they are meeting your organization's goals?
I have been part of an organization that has utilized scorecards to measure the performance of suppliers. Both the stakeholder and the supplier are asked the same questions. We started out slowly and built it up to include more suppliers and categories. It took time and return rate of the survey is still a challenge.
“The Flip Side” is a buyers meeting point resource where we take sales training and information, along with direct input form our own undercover sales advisor to bring you a better rounded perspective on your own position.