Being a customer of choice in procurement is important. Ensuring your supplier feels part of the team is also important.
As procurement professionals we care about the quality, delivery, cost, innovation and sustainability performance of our suppliers. These are usually wrapped up in Key Performance Indicators (KPIs), a key tool within the procurement community.
Now that we as a population are facing resource scarcity, what sort of questions should we start asking ourselves to ensure that we continue being the ‘customer of choice’, and make the supplier feel that they are a prime source of value to our organisation?
Why ‘Customer of Choice’ is Important
Every day, news headlines and scientific reports reflect a world increasingly impacted by unsustainable trends and catastrophic climate events.
Oceans are becoming more acidic, with devastating results on coral and connected ecosystems. The air in major cities is full of dangerous particulates. Crop-growing regions for key commodities are shifting. Sea levels are rising.
All this could potentially lead to resource constraints and risk in the supply chain which procurement, amongst others, should mitigate.
The essential questions procurement should be asking itself are:
- How can organisations possibly develop a ‘single point of truth’, which is reliable and up to date?
- How can they manage contracts and monitor KPI’s?
- How can they handle data and information and avoid rework and duplication and look at the relationship from the supplier’s perspective?
Key Questions for Your Supplier
It starts with the sourcing process where the supplier is evaluated, perhaps even audited, and then at the end when a contract is developed with them. Suppliers will evaluate whether these selection processes run fairly and competently.
In the on-boarding and the execution part of the relationship, the supplier will most probably evaluate how the communications went, how easy it was to create and implement changes to the administrative routines, and how the on-boarding was tackled.
When the relationship starts out, the evaluation will typically be how time consuming or complicated it is to deliver goods and services, and whether the same information is requested by different people.
When it comes to the strategic relationship, a key question to ask yourself is whether you ask your suppliers their opinions about issues that might affect them, including issues around risk.
And then, when you ask them, are you then open to new ideas, new products, and new ways of doing things?
How would this benefit organisations? The time it takes to manage the relationship should become more effective. So should the visibility from spend analysis to sourcing exercises to strategic relationship management.
As a result it should help drive better relationships and help achieve competitive advantage for both parties. And this should of course be linked to your company’s sustainability journey.