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, the seventh and final in this series, highlights seven important strategies and tactics that procurement organizations can use to drive savings while also maintaining and improving key supplier relationships.
Part Seven: Proactive and Ongoing Supplier Outreach
A collaborative and productive supplier relationship, like any relationship, is built upon trust and good communication. After warmly welcoming (and on-boarding) a supplier, procurement departments should continue working to build and maintain strong and vibrant relationships with their strategic suppliers. When procurement departments are able to view their suppliers as assets and sources of value, this investment is easily justified.
Develop a regular conversation around topics in which the procurement team can interact with their critical suppliers to discuss ongoing challenges, corporate goals, plans, and priorities (and how those suppliers can best support those areas), ways to increase and improve innovation, and the means for improving their communication and overall relationships for the mutual benefit of both sides. While the level of information shared and the frequency of communication should vary based upon the type of supplier, proactive supplier engagement that seeks to communicate goals and expectations, align mutual interests, and build trust, sets a great foundation for more productive suppliers and better results.
Moreover, suppliers are just as close, and potentially closer to technological innovation, supply risk, and market opportunities as compared to procurement and sourcing teams. Neither has cornered the market on innovation; neither knows all the risks; and neither sees all of the opportunities to seize more value within the market and leading technologies. Having an open dialogue with one’s suppliers where the two parties can share knowledge, tips, and give each other their view into innovation, opportunity, and risk, can help CPOs drive more innovation and value within the enterprise. Shutting out suppliers or only looking to them when it comes time to conduct a sourcing event misses valuable opportunities and hidden risks residing across the supply chain.
Engaging with and managing suppliers is a key component of any Chief Procurement Officer’s priorities and focus. The procurement function’s relationships with its suppliers are typically the foundation of how sourcing and supply management programs perform. Utilizing the seven keys discussed throughout this series can serve as a catalyst to a series of processes that have a risk of becoming stagnant and repetitive over time. Engaging early and often with suppliers and being proactive with them is almost a given these days. If you’re not doing it, start doing it immediately.
Seven Keys to Better Sourcing and Supplier Management, Part Six: A Warm Welcome
Seven Keys to Better Sourcing and Supplier Management, Part Five: Efficient (and Robust) Evaluations
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
Tagged in: Ardent Partners Research, Collaboration, CPO, Innovation, Lists, Matthew York, Process, Sourcing, Strategy, Suppliers, Supply Risk