Earlier this week, my colleague Pierre Mitchell presented to a group of suppliers within the Corporate United Group Purchasing Umbrella. The topic of his presentation centered on helping sales and commercial organizations of suppliers better service and manage the expectations and requirements of procurement teams in the future.
Much of the talk centered on providing a set of broader set of KPI and related information to help the suppliers in attendance understand the current state on which procurement organizations are measured, as well as where they’re focusing efforts. However, Pierre also offered advice to the supplier organizations on overcoming the “buyers are from Mars, suppliers are from Venus” communication disconnect that tends to be common in commercial relationships.
Pierre suggested the importance of assessing buyer organizations’ requirements and procurement’s portion of those requirements. In other words, suppliers need to better understand the metrics on which their customers are incented. They are likely not just limited to price! Supply risk, efficiency, performance, quality, diversity and related areas are likely to factor into these KPIs and metrics.
Pierre then shared the importance of bringing relevant data and examples of how suppliers work with world-class buyers who are “customers of choice.” As he notes: “You’re segmenting them too!” But procurement organizations might not be aware of what it takes to become a customer of choice – or what suppliers really value beyond just the book of business and relationship. This is where formal supplier performance (SPM) management programs can play such an important role from a 360 degree qualitative feedback perspective.
Stay tuned as we share additional lessons learned and recommendations from the other side of the buyer/supplier equation.