4 Supplier Relationship Management Tactics
PurchTips - Edition # 135 September 18, 2007
By Charles Dominick, SPSM
Are You Truly Managing Your Supplier Relationships?
Use these tactics for managing supplier relationships:
Supplier Performance Evaluation - Ask a supplier's representative how she thinks the supplier is performing and you may hear "Great!" But what if you think the supplier is performing poorly? Who is right? You can't tell without agreed upon performance standards. For your strategic suppliers, agree upon what to measure (e.g., percentage of orders delivered by their due date) and what the goal is (e.g., 95% on-time deliveries).
Idea Sourcing & Value Creation - Better profitability can come from ideas. You can greatly increase the number of good ideas by sourcing ideas from your suppliers rather than just from your company's employees. Some leading organizations have systematic processes in place to collect ideas from suppliers, measure their impact, and reward suppliers for them.
Supplier Development - It's logical that when you improve the capabilities of your company's workforce, your company benefits. But even though suppliers now do work once done in-house, that logic hasn't followed the work. Leading companies engage in supplier development - providing resources to improve their suppliers' capabilities. This often involves training suppliers in methodologies such as Six Sigma or Lean, but really can be any collaboration that makes suppliers more capable of delivering benefit to your company.
A Joint Review of Purchase Costs - If you work for a big company, you have a lot of buying power - buying power that may be wasted if your smaller suppliers have 100% responsibility for buying all of the goods and services needed to provide their product or service to you. By jointly reviewing costs further down the supply chain, you may find opportunities where you can buy some goods and services your suppliers need at a lower cost, ultimately reducing your overall costs.
(keep reading for a FREE Offer)
Spotlight On Professional Development Opportunities
Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.
You see, today's employers refuse to reward employees for yesterday's skills. They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.
Earning your Senior Professional in Supply Management® (SPSM) Certification is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSMSM Certification at:
The Latest Purchasing News
- Do you supervise a purchasing team? If so, learn about a FREE service that may be just for you at: www.NextLevelPurchasing.com/benchmark
- Learn how to beat our October 1, 2007 price increase. Read more at: www.NextLevelPurchasing.com/price
- Considering a career move? Browse over 80 jobs preferring candidates with the SPSM Certification at: www.NextLevelPurchasing.com/jobs
Did you find this article helpful? Our “Best of PurchTips” compilation features over two dozen helpful purchasing articles just like this, including several articles that are not available any other way!