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Using unconditional procurement to drive value

Procurement ExecutiveStrategic Supplier Developmentsupplier managementSupplier OnboardingSupplier Performance ImprovementSupplier Relationships and Collaborations+-
unconditional procurement

The most beneficial buyer-supplier relationships are ones that are symbiotic in nature. Here, buyers help develop the business capabilities of suppliers and, in return, those suppliers help deliver new innovative product and process ideas.

 

I believe if these relationships are to be truly symbiotic, buyers need to take an unconditional approach to purchasing. When I say unconditional, I mean they need to take an unrestricted and unreserved approach to those organisations they work with. They must have an open mind.

 

Buyers and category managers work with a variety of suppliers. These organisations can range in scale and scope and can be either regional or international in terms of their capabilities. However, there is an ingrained bias in relationships, with strategic suppliers often given priority over many others.

 

Buyers should really have a overview and understanding of every single supplier in their supply chain, regardless of their size and status. This comes down to evaluation. They should always evaluate suppliers in the same manner and they should not be subject to different conditions.

 

While this should include talking to suppliers and understanding who is who, it is something that should be integrated with supplier diversity and sustainability initiatives. It should also involve key stakeholders from across the business. They are the ones who procurement needs to satisfy the needs of and so their view of what they need is critical in this process.

 

Beyond this, you should also be asking your suppliers the following questions to ensure they are the right fit for your organisation:

  • How deliberate and intentional is your organisation’s sourcing process?
  • Do you understand what your suppliers’ corporate cultures are like?
  • Do they follow their own employee handbooks or a code of ethics?
  • Do your Tier 1 suppliers manage and create a sustainable workforce to support your buying organisation?

But any review should not stop here. It should be a continual process. Think about incorporating a feedback loop within supplier relationship management, and ensure everyone is held to the same standards. This will drive supplier engagement and bring in new ideas that provide more value creation within your supply chain.

 

If buyers were more intentional about unconditional procurement, there would be far more collaborative work done to promote new ideas that will ultimately drive down costs, increase innovation/speed to market, and create more impact as a whole.

Daryl Hammett
Posted by Daryl Hammett

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