While suppliers are most likely to deliver the message of “supplier value”, it’s incumbent upon savvy procurement pros to optimize the value of every supplier relationship. Too often the link between the pre-sale and post sale “value proposition” breaks once the order is placed and companies get back to business as usual. If anything, the recent financial trends in business scream for something more than business as usual however.
A veteran of 100’s of corporate environments, the Sourcerer has seen client supplier relationships that run from barely interactive order to cash cycles, to highly integrated strategic sourcing. We pause at the use of the buzz word partnership, because a true partnership includes a level of business intimacy rarely seen in business. Yet client supplier relationships that approach or at least include components of partnership are most likely to reach optimal performance.
The dividing line is often in how hard a client is willing to train a supplier to serve them. This requires a key partnership fundamental, trust. Firms must invite the supplier in to learn the components of their business that need supplier support to be successful. They need to develop a plan to integrate suppliers into their business and invest the time and effort to educate suppliers on how to function seamlessly within their environment. It’s important that they manage expectations as well, delivering clear and concise requirements that suppliers are enabled to meet. For some firms, firms that have already embraced the mindset necessary to optimize supplier relationships, this is business as usual at least on some level or in some areas. For other companies, the idea of training the supplier to succeed is as foreign a practice as dealing in wampum.
For those firms, it’s time for a fresh approach. Changes in the world market, both recent and not so recent, have left many businesses scrambling to survive. Contracting demand has made squeezing every last bit of value out of every dollar not a mantra but a mandate. The battle for survival and prosperity, as always, will go to those who achieve and maintain competitive edge. In order to maximize value, firms must optimize supplier relationships. That may require change, not only in process but also in company culture. Firms that have kept doors locked and information close to the vest will need to refresh their mindset. The era of functioning in a company vacuum has been ushered out by the information age. While it remains true that only business partners are actually partners, even the least complex buyer seller relationship is ripe for some level of supplier management. Buzzwords aside, supplier management is more critical than ever.
A veteran of 100’s of corporate environments, the Sourcerer has seen client supplier relationships that run from barely interactive order to cash cycles, to highly integrated strategic sourcing. We pause at the use of the buzz word partnership, because a true partnership includes a level of business intimacy rarely seen in business. Yet client supplier relationships that approach or at least include components of partnership are most likely to reach optimal performance.
The dividing line is often in how hard a client is willing to train a supplier to serve them. This requires a key partnership fundamental, trust. Firms must invite the supplier in to learn the components of their business that need supplier support to be successful. They need to develop a plan to integrate suppliers into their business and invest the time and effort to educate suppliers on how to function seamlessly within their environment. It’s important that they manage expectations as well, delivering clear and concise requirements that suppliers are enabled to meet. For some firms, firms that have already embraced the mindset necessary to optimize supplier relationships, this is business as usual at least on some level or in some areas. For other companies, the idea of training the supplier to succeed is as foreign a practice as dealing in wampum.
For those firms, it’s time for a fresh approach. Changes in the world market, both recent and not so recent, have left many businesses scrambling to survive. Contracting demand has made squeezing every last bit of value out of every dollar not a mantra but a mandate. The battle for survival and prosperity, as always, will go to those who achieve and maintain competitive edge. In order to maximize value, firms must optimize supplier relationships. That may require change, not only in process but also in company culture. Firms that have kept doors locked and information close to the vest will need to refresh their mindset. The era of functioning in a company vacuum has been ushered out by the information age. While it remains true that only business partners are actually partners, even the least complex buyer seller relationship is ripe for some level of supplier management. Buzzwords aside, supplier management is more critical than ever.
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