Executive Briefings

Tell Your Suppliers When They're Good--and When They've Screwed Up

Thirty suppliers or less get 80 percent of procurement dollars at a majority of organizations. With so much money going in so few directions, it makes sense to improve the flow of information between suppliers and the purchasing department.
Consider hosting a strategic supplier council. Invite several key suppliers (even competitors) to offer feedback and share goals for the coming year. The objectives of the council are cost reductions and process improvements. End the session by recognizing and rewarding stellar suppliers.
It's easy to give a good score to suppliers. But if a supplier scores under 80, how you deliver that news is important. Suppliers want to know how they screwed up. If you can't tell them what they did wrong, you won't fix the problem. You want them to improve so you need to give them specific examples.
Source: Industry Week, http://industryweek.com

Thirty suppliers or less get 80 percent of procurement dollars at a majority of organizations. With so much money going in so few directions, it makes sense to improve the flow of information between suppliers and the purchasing department.
Consider hosting a strategic supplier council. Invite several key suppliers (even competitors) to offer feedback and share goals for the coming year. The objectives of the council are cost reductions and process improvements. End the session by recognizing and rewarding stellar suppliers.
It's easy to give a good score to suppliers. But if a supplier scores under 80, how you deliver that news is important. Suppliers want to know how they screwed up. If you can't tell them what they did wrong, you won't fix the problem. You want them to improve so you need to give them specific examples.
Source: Industry Week, http://industryweek.com