To: Procurement Team Leaders
From: Your CPO
Later this week, many of you will be participating in our first annual supplier development event that we've modeled on the success of similar affairs that larger companies in our industry have held. But I would like to remind you that the success of this conference will not just be judged by the number of new ideas we solicit from suppliers to drive savings programs. Nor will we judge it just on the cost avoidance figure we will book on night two from the cash bar when suppliers must buy drinks for us (it's an open bar the first night for suppliers to nurture a collaborative atmosphere and show that we really do care about our vendors, publicly -- employees will need to settle their own tabs).
No, in addition to new ideas and a supplier-funded piss-up on night two, it is critical we use this event to leverage what we've learned from the former psychological warfare operations "PSYOPS" consultants that we've brought into help us extract concessions from suppliers in a new and more subtle manner.
For example, the video at the launch of the event includes very quick clips of pensioners who hold our stock (and coffins/funerals shots) interspersed with discussion on some of our corporate challenges, including booming commodity prices. We have also interspersed very rapid clips later in the video of supplier logos that our current vendors know we no longer do business with -- these logos will appear on a back drop ghost image of bankruptcy headlines and 19th Century hangings. Our PSYOPS advisers have suggested that if we include these subliminal images, we can avoid direct requests for supplier concessions. Even though it is our intent the next day to ask suppliers to volunteer cost reduction ideas and notify them that non-contractual requests for price increases will not be granted and that that we will soon be "standardizing" and "rationalizing" our payment terms to a new corporate standard, we believe it's only fair to "warm them up" to these ideas in advance. After all, surprises are bad business.
Some of you have been selected for special procurement forces duty during the event. This may include things you may not feel comfortable doing. For example, Dirk Spotter (not his real name), a category manager for non-woven textiles in his day job, has volunteered his services to be at the ready. We thank Dirk for his exceptional company patriotism. Dirk will sit next to the bathroom and accidentally spill his tea on the pants of certain male supplier representatives after they exit the rest room before key meetings, in a specified and classified area.
We want everyone to be creative and comfortable in his or her assigned task to humble our suppliers. If Dirk's mission isn't your style, you might want to adapt one of the following disarming techniques:
- When talking with a supplier in a break-out session, make good eye contact and let them speak. When they're finished, say "I'm sorry, could you repeat that -- I was eavesdropping on Sally (a competitor) and missed the last part." This also promotes our commitment to honesty and transparency.
- Show that you care about our suppliers personal lives in casual conversation by asking them how they're feeling and if they've had a check-up lately. You might also ask them where they live and inquire about local real estate values.
- It's always great to inquire about children too. Then follow up with how Junior -- or your niece or nephew -- was just accepted to Harvard with a full scholarship.
- And don't forget to invite a supplier to your morning marathon training run. If you're not really a runner you can always call them at 4:00 AM and say you're swamped resolving an issue with one of their late deliveries.
- Be creative and don't forget to have fun.
We've been advised that these techniques will make our vendors feel more vulnerable as they enter meetings that they believe are collaborative sessions but are in fact negotiations around our new company "Supplier Code of Behavior" policy that they will need to sign before leaving. Please note, we have notified all attendees of the "business casual" nature of the event and the "nature walk" we will be taking in the "hot Arizona sun" on this day to make sure they wear lighter colors which are likely to show wet tea stains the best.
Please also note, the "Supplier Code of Behavior" is designed to be an innocuous counterpart to our "Supplier Code of Conduct" that suppliers signed last year, but in fact requires suppliers to agree to the new general principals of doing business with our company – 3% year-over-year cost reduction requirements, requirements to take bank-funded 40% APR early payment discounts for suppliers that fall into our "risky" category that the internal audit folks have come up with, our policy to pay invoices at 98% of face value based on a variety of macroeconomic factors, required 10% spend set asides for minority and women owned businesses (the "Pass the Diversity Buck Initiative"), etc.
We thank you for your participation in our 2011 Supplier Day and look forward to welcoming you as a team player at the event.
- The CPO