As we move into 2017, it is the ideal time for procurement to examine and explore new ideas. While it is often said that procurement doesn’t get the recognition it deserves within the business, the same could be said for its suppliers. It is time for procurement to recognise and reward the important work suppliers do and reap the rewards from that recognition.
2016 has been a year of global economic uncertainty and there’s no denying that that has filtered through the supply chain.
Payment delays have continued with some suppliers waiting around 100 days to get paid, as businesses try to keep cash flows in a healthy state. Meanwhile there has been a string of high profile CSR issues with factories found to be violating labour rights across the world.
It is at times like this that strong supplier relationships become all the more important.
The introduction of supplier awards is an ideal way to celebrate innovative suppliers and reward them for their hard work and successes. Businesses, such as automotive giant Jaguar Land Rover, have done so.
Creating supplier awards is not an easy task and to be successful clear criteria and clear categories need to be set up, but suppliers do respond positively to them.
For suppliers, there are obvious benefits. Offering rewards can act as an incentive to their work and give a sense of appreciation.
While, for procurement, incentivising suppliers can encourage them to work
harder and bring more innovation to the business if there is the potential offering of an award.
In rewarding its supply base, procurement implants supplier loyalty, and also has an opportunity to analyse and evaluate supplier efforts, giving greater insight into the supply chain and a higher understanding of any issues it may be facing.
It is impossible to give out an award to every single supplier, but the opportunity can have a marked impact on relationships and be a win for both parties.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.