Hindsight on Suppliers
I used to write a column for CW - called Inside Track. For one week only I am revisiting a selection of the challenges - if you think it is still a problem, some ideas to stop history repeating itself. If you don't, go enjoy...
1st published in CW on 16th July 1998 (at the same time this key event was happening)
Beyond Belief
Crossing fingers while shaking hands used to mean the agreement was worthless, for customers and suppliers these days it more probably means wishing for luck. If the growing evidence is to be believed, trust in each other is dissolving, along with the wasted time, energy and cost involved. What has gone wrong?
In reality most problems are caused by genuine misunderstandings, it is not in anyone’s interest for things to go wrong. In my experience the following specific actions not only reduce risk, but also help develop a trusted, strategic partnership:
Customers:
1. Clearly define what role the supplier or product will play and the business benefit to be gained. Identify a quantified benefit before buying.
2. Do not attempt to screw your supplier into the ground during contract/price negotiations – you will pay for it later.
3. Consider appointing a full time supplier “manager” whose role is to ensure relationships with all suppliers are working as agreed.
4. Provide an overall standard to live up to, a code of conduct that suppliers must follow. Never openly criticise any supplier - resolve disputes behind closed doors.
5. Reward supplier delivery by recommending them to other customers, giving them free publicity and involving them in decisions. I know of one company who pays early for excellent work.
Suppliers:
1. Clearly define the benefits of the technology or service – the real customer value. Only accept full payment on delivery of these benefits. That will show you mean business, and believe in your own abilities/product.
2. Be honest when things go wrong. Not only will this win you respect, but every crisis is an opportunity to do that bit extra.
3. Do not make your customers too reliant on your product or services. It may seem attractive to “tie them in” but it usually has the reverse effect of causing resentment. Let your delivery speak for itself.
4. Bring something extra to the table – an idea or innovation for the customer – it may be completely unrelated to the proposed service.
5. Know your prospective customers. Understanding their business will help you win, keep and develop it.
Tomorrow - Projects