5 Steps To Solving Supplier Problems
Do You Have A Supplier That Causes You Headache After Headache?
PurchTips Edition #339 Click here for the printer-friendly version
How do you get a supplier on track if they are chronically delivering late, or not providing correct paperwork, or otherwise failing to perform to your standards? Here’s the five step process I recommend:
First, ensure that your communications (e.g., specifications, purchase orders, emails, etc.) clearly state your expectations. It is not uncommon for misunderstandings to arise simply because the buying organization hasn’t made its requirements sufficiently clear. It’s easy to blame the supplier. But these types of problems aren’t always the supplier’s fault.
Second, know that “what gets measured gets done.” Track metrics for the supplier. What percentage of on-time delivery do you get? What percentage do you need it to be? What percentage of shipments are “defective” (missing documents, mislabeled, etc.)? What percentage do you need it to be? Track these things and report them to the supplier.
Third, have meetings with key executives from both sides where the issues are discussed. A junior buyer and customer service representative will likely be unable to produce the same commitment to improvement as two CEO’s. Have your top person request that their top person meet the metrics you’ve set forth and provide a plan to do so.
Fourth, don’t just limit these types of activities to one supplier and only when problems arise. Supplier performance management should be systematic. This probably won’t be your only problem supplier between now and the end of time. Be prepared for future challenges.
Fifth, if all else fails, replace the supplier if possible. Just because a supplier provides critical goods or services doesn’t mean that another supplier will not be able to do a better job. If the goods or services are critical, your organization deserves to have the best supplier possible.
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