One of the more difficult (and common) hurdles commonly faced by procurement is the transitional process from a longstanding incumbent supplier to a new one. The domino effect of this decision can be felt throughout your organization from all levels, and more often than not, lack of compliance from one level has the ability to derail the entire initiative. The purpose of this article is to demonstrate how to prepare and react to these potential hurdles, and how to put your organization in the best position to handle this transitional process.
Buy-In at Management’s Level:
Obtaining approval to transition from a long-standing incumbent supplier can be difficult. Oftentimes, you’ll need to present a strong, compelling case study to your leadership group. The phrase “if it isn’t broken don’t fix it” holds true within all tiers of business. If this transition isn’t due to poor supplier performance, be prepared to identify a clear path that can lead to significant savings and benefits to the organization’s total cost of ownership. A positive impact to the bottom line can go a long way in obtaining approval and affirmation from this group.
Once the new supplier is approved, it’s important to provide open communication and transparency as the transition takes place. Historically, providing management with an implementation roadmap highlighting key milestones has proven to be a key driver in keeping this group at ease. Once presented, updates via bi-weekly (or monthly) meetings should also be considered to help share any updates to the roadmap as supplier implementation unfolds.
Buy-In at the Local Level:
This initiative will only go as far as the local plant level takes it, so it’s important to generate clear and concise messaging anytime a supplier transition is conducted. If your local buyers and plant workers aren’t properly informed and trained on how to purchase and communicate with the new supplier, this initiative will fail immediately.
First and foremost, providing complete transparency throughout this process helps establish respect and ownership at the local level. For instance, implementation is a complex process that often times faces many unforeseen hurdles. Being open about these potential challenges and requesting input and solutions from the get-go will help create ownership and teamwork at the local level.
Greater transparency can also be achieved through structured communication channels to help drive compliance. For instance, following these two steps has proven to be effective in accomplishing this task. The first step is the distribution of internal memos highlighting this transition which leads to the second step of face-to-face meetings with account managers from the new supplier. The face-to-face meeting will help establish relationships in addition to also establishing a clear line of communication to help reiterate the key points established within the internal memo.
While a definitive blueprint does not exist for transitioning suppliers, hopefully these steps will help guide your team and overall initiative in the right direction. Just to reiterate, communication and transparency will be a key driver to ensure a successful implementation is accomplished.