All the supply chain decisions you make should rely on detailed, accurate market intelligence. This information gives you the insight you need to make informed decisions and feel confident about what your team brings to the table. Applying a blind strategy to your projects is not an ideal situation to be in. There should always be a solid reason as to why you chose option A over option B or supplier 2 over supplier 3.
In Parts I and II of this series on market intelligence, we broke down two key stages of the process: choosing the right team and establishing the right metrics. Even with the ideal team looking for the right things, you have to use your resources properly. Your market intelligence team might be employing all the right tools, but do they know how to use them? In this blog, we'll cover using your resources effectively.
Suppliers = Insider Knowledge
Don’t make the mistake of getting so wrapped up with your internal sources of information that you forget to identify external ones. Naturally, third parties who are out working in the industry every day are going to see some trends that you might miss. Yes, suppliers may be able to provide insider information that isn’t readily available to you. That’s one of the reasons its so important to make optimizing supplier relationships a major priority. Strong supplier relationships have many benefits and being able to ask for assistance in collecting market intelligence is one of them.
Nevertheless, always keep your suppliers' potential self-interest in mind. When you request information from a stakeholder, keep in mind that they could be manipulating the data to make themselves look better or a competitor look worse. Suppliers may be happy to send stats over to your team, but don’t give them the opportunity to fabricate figures and ultimately skew your own data.
Think twice about the information your stakeholders are providing. Suppliers could be intentionally or inadvertently giving you valuable information. For example, if a supplier tells you they were awarded a top-five rating from a leading industry analyst, look up that award and figure out who else made the list. Or, if your stakeholder sends you their productivity metrics and you notice criteria that you never considered, add that to your list of rating scales. Be aware of the little things because they could produce big wins.
You can’t have a strong supplier spread without vetting every company first. Each industry has its own unique set of standards that suppliers need to meet. If a supplier meets those standards better than their competitors, they’ll probably get a contract. During that contract timeline, should you stop vetting the supplier since they have already “proved” themselves? To put it simply, no.
You should be monitoring the company’s performance and behavior as they work with you. This way, when you have to make the decision to renew a contract or not, you can make the decision with confidence. That said, if you can take note of these things before you commit to the supplier—even better. Here are a few things you should keep an eye on no matter what industry you work in:
- How long does it take the supplier to respond to your questions? On one hand, you want you suppliers to be pretty consistent and quick with responding to your inquiries. If it takes them forever to respond, you have to question their professionalism and overall knowledge of that industry. On the other hand, too quick of a response can feel more like an automated reply. You want genuine answers to your questions, not a vague one that was prepared in advance.
- Is your supplier giving satisfactory answers to your questions? Even if they are responding in a timely manner, are they really answering your question? Don’t let suppliers redirect the conversation, repeatedly ask the question until you get a real answer. If you notice this a lot, take note of how often they redirect questions. This behavior could again indicate a lack of familiarity with the product or service or a lack of integrity in general.
- Is this supplier offering valuable insight into the product or service? Ideally, when the supplier gives you information or answers a question, you want to have more information about the subject than when you started. An honest supplier will want you to have as much understanding of the market as you can for optimal performance. Keep note of suppliers that will offer more information than you request.
Identifying Model Industries
Not all external market intelligence comes in a neatly-wrapped box from suppliers. Sometimes the product or service you’re working with has a confidential nature and competitors keep tight holds on the information. Or even more challenging, the product/service is brand new innovation with no historical data. You have to be creative in the situation that the market intelligence you need is not accessible to you, you need to be creative.
Your best bet is to identify comparable technologies, follow their statistics, and draw conclusions from the similarities. For example, if you’re working for a startup that is offering an on-demand plant-watering service through an app, you might be the only company in that industry. However, alike apps are popping up everywhere, so maybe you look at the market research there is for the dog-walking service app or the house-cleaning service app. They won’t be the same, but compare and contrast your product from your model product and make deductions respectively.
One more way to battle tricky spend categories is to look into working with a third-party company. A company with industry-wide expertise will likely have knowledge most individual companies will have trouble finding. They can help you compare suppliers, monitor competitors, and find all other relevant metrics for your industry. Procurement experts do a great job of not only helping to deliver the data but helping to use that data to your best advantage.
Once you’ve figured out what resources you will use and how you will use them, remember to never stop evolving. Each product or service will bring about new challenges and offer new opportunities to gain insight. It’s critical that you don’t get stuck in a “classic” way to finding data because industries are ever-changing and you should be too.