Strategic Sourcing…not Just for Supply Chain Anymore

April 27th, 2006 at 05:47am David Bush - Iasta

On April 6, Paul Levesque, CEO of Customer Focus Breakthroughs Inc. released a mini-whitepaper on CRM Today entitled “The 5 Biggest Customer Service Blunders of All Time” where he, as indicated by the title, discusses 5 blunders to avoid.

The most interesting aspect about this article is that all five blunders would be avoided by anyone well versed in good strategic sourcing principles.

The five blunders, which we’ll discuss in detail, are as follows:

1. Making Customer Service a Training Issue
2. Blaming Poor Service on Employee Demotivation
3. Using Customer Feedback to Uncover What’s Wrong
4. Reserving Top Recognition for Splashy Recoveries
5. Competing on Price

In the first case, businesses invest huge amounts in training programs that identify the behaviors and processes workers are supposed to engage in, in essence dictating what a CSR should do to please the customer. The end result is a mechanized and insincere process that at it’s best can barely be considered satisfactory, and at its worst is a complete failure if the user has a problem that is not dealt with by the script.

***Senior Sourcing Professionals know that there is no one formula that always works. Prices and supply fluctuate, market dynamics change, customer needs mature, and product technologies innovate. A good sourcing professional needs to have the skills and knowledge to adapt to the dynamics of every sourcing event and cannot be bound by a one-size-fits-all solution.

In the second case, businesses assume poor service is due to employee demotivation and look for ways to increase motivation instead of searching for the root problem.

***Senior Sourcing Professionals know that high costs aren’t necessarily the result of supplier mark-ups – especially if the supplier is a strategic partner or a low bidder in a sourcing event. They look for problems with the process and try to fix the root problems.

In the third case, businesses use surveys and feedback mechanisms to try and identify the source of customer problems and constraints. Employees perceive these as formal exercises in finger-pointing, blame assignments, and witch-hunts for scapegoats in the worst cases. Instead, business should be looking for what is being done right, recognize employees for their successes, get to the root of those successes, and replicate whatever works across the organization.

***Senior Sourcing Professionals know that looking for problems does not get results and that you need to look for solutions. They identify best practices and find ways to replicate them across the supply chain to improve processes and reduce costs.

In the fourth case, after something goes terribly wrong and a dedicated employee goes to tremendous lengths to make it right, the employee receives special recognition for their efforts. The blunder? When these catalysts become the primary form of employee recognition, foul-ups become a good thing from a worker’s viewpoint as they create one of the few opportunities for an employee to be recognized.

***Senior Sourcing Professionals know that good performance from comes from dedicated motivated people who are recognized based on their accomplishments in process improvement, cost reduction, and customer (which, in sourcing, are the other business units) satisfaction – not from people who merely respond to a crisis. Moreover, this is the foundation for growth and prosperity.

In the final case, the business makes the most common mistake in business – competing on price.

***Every sourcing professional knows that price isn’t everything – it’s the overall value that results from a purchase that is important. Quality, Availability, Dependability, On Time Delivery, and Overall Service are also important.

In short, CRM needs to take a lesson from Strategic Sourcing.

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Entry Filed under: Functionality, General, Technology / SaaS, e-Sourcing Marketplace