Have you ever had a supplier failure cause frustrations for your organization’s customers?

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If you were to have a similar supplier failure, are you contractually guaranteed that your suppliers would bear the cost of fixing this type of problem and fix it quickly?

According to a recent article in the Pittsburgh Tribune-Review, the State of Pennsylvania Department of Transportation (PennDOT) recently ran into a similar situation.

The laminate used for PA driver’s licenses showed (under black light) the PA as AP instead.  Thus, the licenses would be considered as fakes or counterfeit by those who check licenses such as for entering a bar for instance.

In all, more than 100,000 Pennsylvania drivers could be affected by the error. PennDOT is sending out replacement licenses at no cost with the two offending vendors footing the bill.

The main takeaway from this story is being well aware of the terms of your supplier contract(s).  Do you trust that your suppliers would do the right thing without the need for an iron-clad contract?  If not, now is as good a time as any to speak with your suppliers to about “what-if” scenarios and to get terms in place that meet the needs of your business, and, more importantly, your customers.

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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