What gets measured, gets done

Some really good advice on the article, whose link is below, on managing contracts and relationships with suppliers.

http://www.supplymanagement.com/news/2013/making-the-relationship-work

Here are some further thoughts:

If it is nothing more than an opportunity to use cliches then the following might be as good as a start as one might need:

What gets measured gets done.  Set your KPIs that are meaningful to the success of the business ans ensure that they are SMART. I appreciate that this may sound obvious but making sure that you can actually meaningfully measure success is essential; setting a KPI that is not measureable is pointless.  This can also be further explained as "garbage in, garbage out".

It takes two to tango.  The relationship between supplier and buyer is very much a 2 way street; both parties have a vested interest in making the arrangement a success.  Fundamentally, the buyer wants value for money and the  supplier wants repeat business.  Beating the supplier down for a quick win doesn't help win supplier loyalty or responsiveness; Taking the buyer for a ride on price and service won't increase the chances of repeat business.

Rome wasn't built in a day. Building a relationship is not an overnight event and building a meaningful relationship between supplier and buyer takes time and understanding.  The process starts right at the beginning of the procurement engagement, throughout the competition and contract award and into service delivery.

It's a case of give and take. This certainly doesn't mean that as a buyer you should accept poor service or poor quality, equally as a supplier you shouldn't accept poor treatment, unreasonableness demands or delayed payment.  What this cliche is getting to is that there might be a need for compromise, either to help one party in a difficult position or equally to a mutually advantageous position. I once worked for a buying organisation who was embarking on a long-term partnering arrangement with a supplier; during discussions it was pointed out that if we were prepared to receive our order three months later then the price would be 20% lower due to the ability to batch our order with another and create a larger and longer manufacturing run.


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