Attention Procurement: How to Be a Good Customer

Every month, I find ISM's Inside Supply Management has a clever little number of two that has timeless and often sage advice. One such article recently covered a topic that we don't often pay enough attention to in procurement: how to be a good customer. While I won't spoil the broader piece for ISM members who can read the entire article, a few things points stand out, which I'll call attention to below. But perhaps more important in being a good customer to suppliers, we must think concretely (e.g., changing our sourcing approaches in certain categories to tap supplier creativity versus beating them over the head) and in more subtle and abstract ways (e.g., understanding their motivations, concerns, perception on a broader customer chess board). Some of these are behavioral changes we should make while others are skill-based. But they're all important to being a good customer.

One company cited in the article used a case of declining supplier performance metrics to evaluate their broader situation and relationships across their vendor base. But the challenge was even though "the supply management team held general key performance indicator (KPI) meetings with its suppliers...[the] feedback wasn't particularly helpful because suppliers reported everything as being good." It responded by finding a new method to get "honest, confidential input" regarding its performance as a customer to this supplier. It went about this by doing confidential surveys with its supply base in a manner where information was "aggregated to identify trends/areas for improvement that were, in turn, presented back to suppliers for more specific discussion." Curiously, the company found some of the "most valued responses came from the outliers."

Of course this information was, however, only the start of what came next -- discussions based on increasing levels of transparency. If aggregated surveying provided the energy to turn the supplier development lights on, the factory still needed to produce a product. And this is where being a good customer really begins, starting with active listening, probing questions and collaborative responses and actions. However, as the company discovered, what matters most about being a good customer over time is consistency. In other words, once you embark on a supplier development program to improve overall relations and outcomes, you better continue it.

- Jason Busch

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