As Chief Procurement Officers (CPOs) know all too well, how and what you communicate during the sourcing process sets the stage for the resulting supplier relationship. And while that relationship may never become a true marriage of equals, there are several things that sourcing and supply management professionals can do to get things started on the right foot. This article series highlights seven important strategies and tactics that procurement organizations can use to drive savings while also maintaining and improving key supplier relationships.
Part Six: A Warm Welcome
For better or worse, the sourcing / negotiation process can have a real impact on the post-contract relationship that enterprises have with their suppliers. A “win-win” negotiation is difficult to achieve and, quite candidly, is not the goal for many procurement organizations that pursue the best deals possible in an aggressive way. There is absolutely nothing wrong with taking a hard-line approach to supplier negotiations, however, the aftertaste of a hard-fought and protracted negotiation can make the development of a strong, post-contract supplier relationship difficult to achieve. Ardent Partners believes that there is a fairly straightforward way to improve the tone and tenor of most buyer-supplier relationships – warmly welcoming the supplier and on-boarding them with a process that recognizes, and even accommodates their needs and requirements. It may take some time for suppliers to move beyond a tough negotiation, but sourcing and supply management teams would be wise to use the on-boarding (or renewal) process as a means to set or re-frame the relationship in a positive light.
How much time and effort spent welcoming a supplier should depend on how important or strategic each one is to operations and results. But, even tactical suppliers can be welcomed with simple, standard communications that frame them as partners and assets. Not all negotiations are confrontational or end with hard feelings; but, when they do, procurement departments will find that a little etiquette can go a very long way in establishing a strong supplier relationship.
Conclusion
Engaging with and managing suppliers is a key component of any Chief Procurement Officer’s priorities and focus. This includes suppliers with whom you negotiated hard, but will now depend on to fulfill your business needs. Yesterday you were transactional parties; today you are partners. Moving beyond this dynamic can be difficult (hopefully you took our advice from last week and didn’t beat up on your suppliers). Now that the deal is done, both parties will benefit by treating each other as equals and teammates, because in the end that is what you are to each other. In the words of U2, “there is no ‘them,’ only us.”
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