Poor Communication = Poor Supplier Performance, Part III

In the last post in this series, I wrote that a good specification was the key to avoid unfulfilled expectations from your suppliers.  And I listed a few of the many possible components of a good specification:  the product/service description, physical characteristics, performance characteristics, and compatibility requirements.

And I was just getting started.

Then, I said that, instead of needing a 40-page specification for every purchase, you may be able to substitute one simple thing.

What is that one simple thing?

An SKU.

Do you know what an SKU represents?  From seminars that I’ve done, I’ve seen that only about half of purchasing and supply management professionals do.  And even fewer know what the letters S-K-U represent.

Well, if you’re in the segment that doesn’t know what an SKU is, that’s alright.  I’m here to help you.

An SKU is essentially a part number.  SKU stands for Stock Keeping Unit.

Sometimes, those attendees at my seminars who are familiar with the term “SKU” can’t believe that so many people in the field do not know what one is.  After all, it is one of those “standard industry terms,” right?

Now, there’s two points I want to make here.

First, let me say that my choice to use the term SKU rather than part number is an example of using jargon.  Using jargon in a communication with a supplier assumes that your counterpart will know what you mean.  And, in many cases, they will.

But, as my polarized groups of seminar attendees illustrate, people are often surprised at the number of people who should know a jargon term, but don’t.  Therefore, identify jargon and avoid using jargon when communicating with suppliers.

If you can say part number or SKU, say part number.  When I ask how many of my seminar attendees know what a part number is, 100% raise their hands to indicate that they do!

That’s the first point.  The second point I want to make is that you don’t need a perfect specification for every purchase.  You may only need a part number.

A part number may, in one fell swoop, communicate to the supplier everything you want to communicate to the supplier:  color, dimensions, material, etc.  But, then again, not every purchase is that simple.

What is the unifying rule determining how much detail your specification needs?

My rule is that you should provide your supplier with the detail necessary to accurately and adequately describe what you need.  For some purchases, that might be a part number.  For others, it may be a 40-page specification.

The key is to analyze the situation and determine what exactly you need in order to accurately and adequately communicate to your supplier what it is you need so that there will be no unmet expectations on delivery day.

Still quiet here.sas

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