Supplier Relationships

Add comment December 6th, 2006 David Bush - Iasta

In the October Issue of Inside Supply Management, Lisanne Bogle of MGM Mirage, outlines ideas for effective supplier relationships. The article requires membership but she goes beyond the expected metrics of price, quality and service. All of these are, of course, important, but there are other things to consider for establishing a win-win relationship with suppliers.

• Supplier Size: “Bigger is not always better” and many times the perception of the smaller vendors is unfounded and highly inaccurate. We could not agree more - good take.
• Reciprocity: Should your suppliers also be your customers? A complicated question and, in some cases, yes. Ms. Bogle brings up points about ethical standards and restraint of trade considerations. The final rationale should be the total cost of ownership which is impacted by this.
• Supplier Diversity: Capturing and maintaining good data on supplier diversity can help with the problem of reducing supply base while increasing diversity spend. This is discussed as a very difficult problem, and rightly so but enriched data in a Spend Analysis package should help.

The article concludes with the idea that, regardless of size, under performers need to be communicated with and given time frames for correction or be removed from the supply base. All sound advice.

Entry Filed under: General, Suppliers, Supply Management Best Practices