Its not our fault; This is a provider error! Sounds familiar? After more than 25 years of experience in the financial services industry as a supplier and service provider contractor, I have seen the best and worst relationships with suppliers. From this experience, I offer you a brief description of practical strategies for creating a win / win script with your suppliers.
The best place to create a solid base of relationship with suppliers is to know what you want to achieve with your suppliers and your relationship with suppliers. Define your approach to supplier relationships clearly in your business organization by developing your strategic plan. I cannot emphasize the importance of a thorough and iterative strategic plan for your business organization, which includes the initiatives necessary to promote good relations with suppliers. Do not stop! Cascade your strategic initiatives into ethical policies, procedures, and practices across the organization so that you build a culture around good supplier relationships. Make sure everyone knows, understands and is committed to adopting and implementing strategic concepts that maintain good relationships with suppliers. Think about how to use positioning documentation that requires such certification, such as a supplier's document, supplier confirmation, or the publication of supplier ethics.
After the strategic intentions of your business organization are clearly defined and cascaded through the organization, evaluate the vendor selection processes. Supplier selection processes should be determined by selection principles and methodologies divided into two components, general and specific criteria. Common criteria apply to any supplier and include evaluation components, such as analyzing the effectiveness of financial results of suppliers, references, litigation history, leadership principles and industry information. Specific criteria apply to the specific requirements for the supplier’s products that are required to meet business objectives, and include elements that your organization will enter in the RFP or on request. There is extensive knowledge (BOK) of creating sound ethical general and specific selection criteria in various procurement and supply chain professional groups. This amount of knowledge far exceeds the scope and potential of this article for definition. I refer you to this “well cured” BOK for detailed analysis and guidance on the design of your final detailed selection process. However, in terms of relationships, here are a few key points to keep in mind when evaluating and choosing your winner:
o Does the seller have a well-defined customer relationship strategy that goes beyond the organization chart and hierarchical accounts of executive and sales representatives?
o Do key supplier organizations provide access to your contact information in addition to the designated account manager or sales executive?
o Does the supplier organization have a mechanism to periodically assess customer satisfaction and eliminate any problematic issues?
o Does the seller seem to be trying to find out about your business and your industry?
o Is the seller willing to go beyond your agreement to provide meaningful advice to your organization that can help increase income or reduce costs?
o Does the provider increase an open invitation to visit or visit their home office or remote locations?
All these questions are designed to help you determine whether your supplier is “endowed” in a business relationship, in addition to the clinical conditions of your agreement, and is ready to accept the opportunity for healthy relationships with suppliers.
With a methodology for selecting ethical suppliers and choosing a supplier (s), the next step is to agree on an agreement. Never accept a standard supplier agreement at face value. Negotiate the basic terms of your agreement and allow the legal staff of both organizations to build a binding contract that includes the basic terms of your agreement entered into the agreement and reflects the values of each organization in relation to the relationship between suppliers and customers. Many of the contract terms are routine, mechanical in nature, and include NDA, cost schedules, prescribed duration of service (s), SLA, performance and penalties, and specific results. Although it is undoubtedly important to create a clear understanding of each of the parties and # 39; The fulfillment obligation defined by another language in the contract will indicate an agreement that also represents obligations regarding the establishment and maintenance of a healthy supplier / customer relationship. Too often, the sensational words of the mechanical and legal aspects of the contract have precedent, and the tactic of the relationship takes second place - if at all - to the necessary legal boredom necessary for fixing the results. Each of the agreements on the mechanism and the relationship is equally important to determine a healthy relationship between the seller and the customer.
I strongly recommend that you identify and record initiatives for relationships that will develop business relationships on an ongoing basis. Do not wait until this effort begins. For example, the contract language should define the minimum intervals for constructive contact, ranging from periodic phone calls from account managers to site managers to vendors. Invitations to participate in user groups sponsored by the supplier, invitations to vote at annual meetings of suppliers / customers and an extended notification of product development. These agreements are promising and proactive efforts to satisfy customers and healthy relationships with suppliers. Such preventive measures can prevent difficulties and reduce costs. Contract language should also define constructive and cost-effective approaches to resolving problems, including negotiations between suppliers / customers and options for structured arbitration as a means for solving civil problems and preventive litigation with costs and damages. A substantial decision is an absolute last resort and can signal the end of any hope of restoring the relationship between suppliers and customers.
As in the case of a change in the right to participate in lawsuits, how do you elegantly change suppliers, even when the relationship between suppliers and customers is good? The answer is to create the conditions for this inevitability at the beginning of the supplier selection stage and the negotiation stage. The reasons for ending a relationship with suppliers / customers are endless, so make sure you “leave the door open” for an elegant breakup for both parties. This is otherwise known as an exit strategy. For example, I participated in the selection of suppliers and the conclusion of contracts for double suppliers with contractual obligations representing a 50/50 percent commitment, a place to review changes in volume obligations or exclusivity. Each supplier knew that there could be three possible outcomes to this arrangement; Continue to fulfill your obligations at the 50/50 level, transfer the main volume to one or another supplier or to exclusivity.
Why try to put so much effort into the relationship between suppliers and customers? The reason is that investment costs more than the cost of a bad decision. Realizing the value represented by investing in good relationships with suppliers requires only one explosive ethical issue or one costly judicial intervention. Treat your relationship with suppliers as a valuable partner in your quest to fulfill the strategic mission of your business organization. Include language in your business organizations to assess values and reach out to suppliers, as well as your industry, your customers and your community. You and your salespeople are mutual extensions of each other. Therefore, be careful to enter into relationships that represent a good alignment of values, business goals and mutual cooperation, which will have a good effect on both the supplier and the customer.
