As Chief Procurement Officers (CPOs) know all too well, how and what you communicate during the sourcing process sets the stage for the resulting supplier relationship. And while that relationship may never become a true marriage of equals, there are several things that sourcing and supply management professionals can do to get things started on the right foot. This article series highlights seven important strategies and tactics that procurement organizations can use to drive savings while also maintaining and improving key supplier relationships.
Part Five: Efficient (and Robust) Evaluations
Before a sourcing team launches a competitive bid, it should have some established or general criteria and/or methodology for evaluating bids. It is possible that new information will arise along the way that will necessitate process and priority shifts. But, within the general framework, the team should understand what it is trying to achieve, what it is looking for in the supply base, and the general time-frame in which it will make its final decision. There are very few reasons this information should be withheld from the bidders.
Perhaps even more important than communicating the evaluation process to prospective bidders is the need for the sourcing team to conduct the evaluation process on the timeline and in the manner that was originally communicated. Easily one of the most frustrating things for suppliers involved in responding to an RFx is when, after investing significant time and effort in preparing a bid, they fail to receive timely feedback or status updates from the buyer, much less a confirmation of bid acceptance. Those suppliers who have been frustrated in the bid process are much less likely to participate in one with the same group again.
Sourcing professionals can add significant value to the process by keeping their teams on task and making sure that evaluations are both thorough and timely. Sourcing teams need enough qualified suppliers willing to participate in order to run a successful sourcing project. They should, therefore, respect the time and effort that suppliers invest in the bidding process by being efficient and responsive after all the bids have been received. Finally, it is important to note that efficient evaluations can also be robust and thorough. If an evaluation is expected to be difficult and time-consuming, simply communicate this development to the bidders. Teams that incorporate simple courtesies and interactions into the process can build sizable goodwill with suppliers.
Buyers and suppliers today are increasingly collaborative and collegial; the “it’s us versus them — let me go beat up on my suppliers” mentality needs to be thrown in the great dust heap of history. Suppliers can and should be treated as strategic business partners; and as such, ought to be afforded as much feedback on their bids and proposals as possible, and as soon as possible. That’s the kind of treatment you’d want and expect from a true business partner — be that business partner to your supplier and work together to succeed.
Seven Keys to Better Sourcing and Supplier Management, Part Four: Clear Communication
Seven Keys to Better Sourcing and Supplier Management, Part Three: Tighter Specifications
Seven Keys to Better Sourcing and Supplier Management, Part Two: Early Engagement
Seven Keys to Better Sourcing and Supplier Management, Part One: Know Your Spend
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