A recent painful customer experience with one of my suppliers got me thinking about the days when I came on board to manage the strategic services supply chain for a multinational corporation.
My job was to get our suppliers back on track following a six-month leadership gap.
I've worked both sides of the field and know what it takes to keep the wheels running, while reinventing the business through ongoing process innovation and product enhancements.
Three primary responsibilities of a Supply Chain leader and manager include
- Managing day-to-day operations; overall performance of the suppliers, cost efficiencies
- Forward looking opportunities that address the company's changing needs
- Continuous improvement and performance enhancements--innovative design, service and solutions that keep the company and your suppliers competitive
Supplier complacency can throw a big wrench in your plans.
Sometimes the challenge comes in the form of suppliers who have been servicing your account for a number of years with automatic agreement renewals (evergreen contracts).
Your suppliers can develop a too-comfortable client relationship that easily slips into complacency if not kept in check. Mediocre performance and service escalations are usually not far behind.
But it need not escalate to this point if you're paying attention to quality and performance deviations. Whether you're using formal tools such as Six Sigma, or less formal means of gathering data, such as surveys and customer interviews in conjunction with quarterly executive/ operational reviews, these devices will help you to identify productivity bottlenecks and/or supplier performance issues and avoid a downward spiral.
Supplier Check Points
Reduced Service Levels
What are your customers saying about the supplier's service? Pay attention to the rumblings of unhappy customers who might not always respond to formal surveys. Consider calling or emailing customers with an informal inquiry or invite your customers to lunch where you get a chance to find out what's on their minds.
Sluggish Product / Service Offerings
When was the last time your suppliers upgraded their product or service offerings? Do they continue to use the same processes to manage their business? If the team isn't excited about improving what they offer to the customer and how they deliver it, it's time to find out why or, perhaps, begin sourcing for a new vendor.
Less Focus on Innovation
When was the last time a supplier wowed you, I mean, really wowed you! Did they unveil a new product or service, an enhanced version of a current offering, a process improvement that truly reinvented how they did business, or even suggested innovative ways to add value in other areas of your business? Do your suppliers invest in their own product R&D or, at the least, propose a cost sharing structure between your company and theirs to reinvest in the business and the relationship?
Shift from Proactive to Reactive Modus Operandi
If you notice that one (or more) of your suppliers are spending too much time on customer "fire drills" that suck the life out of the staff in responding to and correcting problems, it could suggest that your vendor is spending less time on planning, goal-setting, and communication. On the other hand, it could mean that your customers are unreasonable in their requests and service expectations, so you might need to intervene and negotiate on your supplier's behalf to understand the root cause. Although you don't want to tell your supplier how to manage their business, you'll want to pay attention to the warning bells.
Less Commitment to the Partnership
Separately, each of these checks raises the bigger issue of the overall health of the client-supplier relationship. Complacency can lead to lethargy that creates a snowball effect of service degradation. It's much easier and less costly to rebuild a relationship and turn around a supplier's performance by paying attention to your checkpoints than it is to replace a vendor.
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