Right Vendor, Then Right Cooperative Thinking

First, I want to post from the Procurement Leaders Blog. It is an excellent post and I suggest you read the whole thing here if you like what you see below.

Good supplier communications are a two-way street – and CPOs are responsible for ensuring that the traffic flows smoothly both ways. On one side of the highway, you have to let suppliers know your company’s strategic goals and how you feel they are helping you implement them. On the other side, there should be no barriers preventing suppliers from telling you how easy or difficult you are as a customer. That’s how you build trust, and trust is one of the key aspects of effective supplier engagement, as Geoff Pollack, senior director of A&M at Alvarez and Marsal, eloquently explained at a recent Procurement Leaders Masterclass in Chicago. Regular meetings help in that effort, as do scorecards that allow suppliers to tell you how they feel about their relationship with you. But, those efforts may not be enough.

Really, I recommend you go read the whole post

When you are looking for a supplier, I hope you use a checklist to organize your thoughts. Next, check to make sure you list checking out the cultural dynamics of the factory.

  1. Do workers like being there or will you be seeing new workers each time you visit due to disgruntled workers leaving and taking your IP with them?
  2. Will this owner and/or manager open up when there are problems or close down?
  3. Is the owner trying to butter you up and fool you or is he trying to help you understand what he has  and can do?
  4. Does the owner really want to know deeply what you want or is he just trying to make you feel good?
  5. Is the management transparent in helping you know their legal as well as technical situation?
  6. Is it a learning culture or a top down culture?
  7. Does everyone just listen to the owner or are many voices heard?

Actually, you need to show some creativity by creating a safe environment so they will talk.  Then dig to find out how these guys handle problems and what they are learning and have learned recently.

Really, to understand how the relationship will pan out is critical, and you need to invest in understanding them beyond what equipment they showed you.

Once you have chosen a vendor, then sit on the same side of the table with him or her. Open up the conversation to really hear what they are thinking. This builds their ownership and protects your IP.  Finally, it brings out whatever innovation can be found in them.

That is what you need.  Other thoughts in this Tomb Sweeping week?

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Posted in: External Stakeholders, Sourcing

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