Welcome back to the fourth installment in a series of case studies designed to test hypotheses I have regarding how supplier size needs to be factored into sourcing and supplier management approaches. In today’s case study, we’ll be exploring some work we’ve done with Office Depot.
The background of this case study goes back to early 2004. At that time, we were preparing for the July 1, 2004 launch of the SPSM Certification.
Because of the challenge and prestige of the SPSM Certification, we wanted to award our successful candidates with something more than just a paper certificate. Part of becoming certified would involve candidates receiving a beautiful glass engraved award:
Now, we wanted a really nice award to recognize a really nice achievement. But most of the suppliers we talked to said “just go look at our Web site.”
I love Internet shopping. But, when buying “luxury” items, it really helps to see things at a higher than 72 dpi resolution and to speak with someone who knows the product.
Fortunately, Gerry Wallace – a manager of promotional products for Allied Office Products (which has since been acquired by Office Depot) – was willing to spend time with us. In fact, I visited his office for over an hour during which he made sure to ask the right questions and to discuss all of the options so that we got it right.
I was so impressed that Gerry would spend his time with a client that may only end up spending $70 for a prototype. Fortunately for both of us, the SPSM Certification has become hugely successful and we’ve purchased an unbelievable amount of awards since then!
The arrangement has worked out great. We and our students are so pleased with the high-quality awards that we have not changed the design in the years since introducing the SPSM Certification.
Sure, there has been a bump in the road along the way. That bump related to how we manage the shipping of the awards.
Basically, we have Office Depot ship the awards directly to our students. This minimizes several things: the cost of shipping, the cost of handling, the risk of the awards being broken due to handling, and the time it takes to get the award in the students’ hands.
But as we started to order multiple awards per day, on a few occasions the awards were shipped to the wrong students when we ordered those students’ awards on the same day. This was frustrating to me.
We strive to not just provide our students with a certification – we strive to deliver an “experience” filled with joy, pride, and appreciation. Eagerly anticipating your award only to find someone else’s name on it is a big disappointment. Then having to send it to someone else isn’t much fun.
In my purchasing experience, I’ve seen problems like this reported to a sales person: the sales person gives lip service about the problem being fixed, the problem is never investigated, and the problem recurs. Fortunately, there was real action and not lip service with Office Depot.
Gerry visited our offices, talked through the problem, and went to work internally. That was about a year ago. We haven’t had a similar problem since.
As the SPSM Certification continues to grow, our volume of awards does, too. As a part of the experience that we provide to our students, I actually consider these awards a strategic category for us.
So it’s the ultimate situation when sourcing a strategic category to have a supplier spend the time up front to make sure things are perfect despite no guarantee of any type of volume and then effectively and immediately address the invariable problems that arise during a long-term relationship. Office Depot in general and Gerry Wallace in particular have done a great job of supporting us!
OK, so we’ve covered case studies of four large companies so far in this series. Next up, we’ll be exploring supplier management and sourcing strategies with small suppliers. As I’ve mentioned in previous installments, I’ll be holding off on summarizing the lessons and guidelines from these case studies until I’ve finished the series.
To Your Career,
Charles Dominick, SPSM
President and Chief Procurement Officer
Next Level Purchasing, Inc.
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