A few weeks back, the Strategic Sourcing & Procurement Group on LinkedIn held a knowledge-sharing conference call based around the question “Do penalties improve supplier performance?” Shortly after the call, Michael Koploy posted a nice summary on softwareadvice.com. That summary covered these five top takeaways from the call:

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  1. Incentives Needed to Balance Supplier Penalties
  2. Increase Supplier Performance Visibility & Communication
  3. Create Escalating Expectations to Avoid the Status Quo
  4. Start Incentives & Penalties with High-risk Suppliers
  5. Set Unique Goals for Suppliers Across Different Industries

If interested, you can read Michael’s complete explanation of each of these five takeaways here. However, I do have a question to add to the discussion: who exactly owns the customer-supplier relationship on both the customer and the supplier sides?

I don’t recall ever seeing guidelines for establishing the appropriate contacts. These things tend to just happen. But I often do see customer personnel getting involved in deals that could be delegated southward on the organizational chart. And I also see customer personnel not insisting on having a higher-ranking contact when they should.

So, I prepared the following matrix for who I would consider the typical owners of the customer-supplier relationship based on the relative sizes of the organizations involved. It’s not universally applicable, but I think it is representative of how the relationship is handled most smoothly in most situations. But I’d also welcome your thoughts on “who-should-be-dealing-with-whom.” Feel free to post your comments and share your experience.

A matrix shows how to determin who owns the customer-supplier relationship

To Your Career,

Charles Dominick, SPSM, SPSM2

President & Chief Procurement Officer

Next Level Purchasing, Inc.

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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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