Supplier performance evaluation programs help keep suppliers “in line” because suppliers know that they are “being watched” and measured.
But most companies usually only formally evaluate a small percentage of their suppliers. Most use the 80-20 rule to determine which suppliers will be evaluated – the 20% of suppliers to whom 80% of the spend is directed.
But, of course, the other 80% of suppliers can cause headaches for buyers, too!
In these cases, it is important for these buyers to know how to handle situations where one of their suppliers just isn’t performing satisfactorily. Obviously, the first step is to try to work out the situation professionally.
Unfortunately, that doesn’t always work.
So buyers should know what the second step is. It can be a frustrating and emotional time for buyers, so they shouldn’t necessarily be left to their instincts to decide what to do. Many of us have lost our tempers trying to resolve situations and later ended up being embarrassed by how we reacted.
So I think every purchasing department should have a plan for what comes next.
Here are a list of things you CAN do. You should decide what you SHOULD do, and in what order:
- Speak more aggressively to your contact at the supplier
- Contact a member of the management team
- Arrange for an emergency on-site visit at the supplier
- Threaten to switch suppliers
- Switch suppliers
- Use social media to expose the supplier’s poor performance
The possibilities are endless. But, again, you should know in advance what you are going to do, in what order.
Things that should never be a part of your escalation plan are:
- Using profanity
- Making a personal threat
- Losing control of your emotions (raising your voice and sounding out of control can, unfortunately, sometimes work better than being professional, but you should actually be in control regardless of how you sound)
Starting my career as a buyer and now being a president allows me to have fun and test some things that I would have worried about being fired over in the past. Perhaps I’ll share some of my experiments in a future post!