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Are your suppliers punishing you?

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Ever wished you were a fly on the wall when your suppliers meet to discuss your contract and the relationship they have with you?

Trust me good or bad they have the conversations on many levels just as employees have conversations about their management.

What do you think your suppliers are saying about you?

Ideally of course they would say: “what a great customer to work for:

  • they value the relationship and have confidence in our ability to deliver
  • they see the big picture and put the end goal ahead of their own personal interests
  • they always seek our input in solving the business problems rather than dictating how things are to be done
  • they are enthusiastic and responsive
  • they understand why we are in business and their role in helping us improve and grow”.

I hope this is what they are saying about you. It is exactly what our 2017 Procurement Study found to be the relationship attributes with the highest positive impact on supplier performance.

When we compared what suppliers and buyers think is important we found that buyers tend to overestimate their management capability and the importance of factors such as:

  • making clear what the supplier can expect to receive when performance goals are achieved
  • being specific about what level of performance is required from the supplier
  • communicating the importance of achieving the goals of the contract to all internal stakeholders and to the supplier.

Buyers rely too much on communicating their expectations, while suppliers are more motivated by buyers who trust, develop and seek their input.

So, there you have it straight from the horse’s mouth – your suppliers actually telling you how to get better performance.

Those buyers that listen and improve their management style will reap the rewards while the others best not be that fly on the wall.

Topics: Procurement and Contracting

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