Posted by: Christian Verstraete | December 4, 2009

Put yourself in the shoes of your suppliers

In a previous post, I talked about the need increased partnerships with suppliers, particularly in times of recession. I mentioned the difference in approach taken by Japanese and western companies. But how do we change our approach? What do we do differently? Do we just blame the procurement department, or are we ready to do something about it?

Before arguing what we could do, let’s put ourselves in the shoes of our suppliers. I believe we can all quickly summarize what we expect from them. We want assurance of supply, flexibility, and obviously all of this at the best price and with the highest service. And by the way, we want the latest and greatest products, we want innovation and we want them to be predictable. We absolutely hate surprises.

But what‘s in the suppliers mind when they deal with us. Actually many of us know the answers because we also are suppliers to other companies. And what are we asking ourselves in such situations? Well let’s sum up a few:

  • Can I make money in this deal?

  • Am I in it for the long run?

  • What’s the risk of being dumped in the next round of negotiations?

  • How much extra discount will I have to give?

  • Do I have enough visibility of what the customer is requiring to be able to anticipate the demand?

  • Can I trust those guys to understand I also need to be successful?

Those are very good questions any business person should ask. But do we keep them in the back of our minds when we sit at the other end of the table. Are we looking for a “win-win” situation? Maybe we should get our sales teams talking to our procurement guys.

Now, you can argue that the only thing you are interested in is getting the lowest price as you need to make money. You have a point, and as long as everything works fine, you will get the benefits. But in case of shortage, who will first be dumped by the supplier? Is it the customer where he makes good money or the one that doesn’t profit him? Well, you probably know the answer. You also know your frustration if you happen to be that customer.

If you are interested at pursuing your thinking around collaborative sourcing, you might want to read an extract here.

Do you agree with me, do you recognize yourself in what I just wrote? Give us your feedback. By the way, in the next post, I will review how the supplier participates in building a more resilient enterprise.

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  1. […] which implies partners  share information. And here is where the partnership, discussed in a previous blog entry, actually comes […]

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