How Supplier Relationships are like Marriages: Lessons from ProcureCon Indirect East

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Cultivating a meaningful relationship with your suppliers can be difficult at first, but when accomplished, the effort can produce positive and lasting growth opportunities for both companies. Taking steps to get to this point, though, takes care and mutual respect.

Recently at ProcureCon Indirect East, I had the privilege of listening in to “Providing The White Glove Treatment To Your Suppliers,” a panel moderated by Joseph Richardson, president and CEO of Professional Purchasing Partners. During the session, Richardson challenged the audience to think beyond a simple checklist for managing their supplier relationships, encouraging them to instead seek a true change in mindset and a willingness to develop flexible for each supplier their company worked with.

“It’s not just white glove treatment,” he said, “it’s more of a culture, it’s a philosophy, it’s a way that we do business…it’s not one-size-fits-all.”

Extending this to the panelists, he looked to Christian Widmann, senior manager of global indirect commodities at Welbilt, for his take on the most important elements in creating a healthy relationship with suppliers. A 32-year procurement veteran with experience extending across the food and manufacturing industries, Widmann stressed that establishing expectations early on was key.

“When we sit down with a client, we really discuss what is expected of us and what is expected of them,” he said. “If there is a conflict of interest or if there is a problem to solve, how do we escalate it? Who are the people involved in that process?”

But more than just asking these questions of both parties, Widmann also stressed documenting everything and signing a memorandum of understanding “to ensure if there are any issues, you’ll know how to resolve those issues.”

Michael Perry, manager of indirect procurement at The Scotts Company with a strong background in category management and consulting, mirrored these thoughts, but also noted that this doesn’t have to happen at a set office.

“At ScottsMiracle-Gro, we host an annual suppliers conference. We invite the top one hundred and thirty suppliers in our organization, and we have all of our C-level leadership come and we communicate what our goals and objectives are for the year.”

If conferences are not an option for you and your company, a simple rotation of which facility you visit can still achieve the positive effect you are looking for in building your relationship — just be mindful of who is in attendance.

Sanjay Setty, who held procurement leadership positions at Mondelez International, Kraft Foods and Cadbury before joining Kind LLC as vice president of procurement in 2014, emphasized that in his experience, “getting the appropriate people from marketing, sales, HR, R&D team or whomever, can go a long ways to foster collaboration, and getting better resources and attention from the supply base.”

After key shareholders are established, though, it is important ask the right questions to propel growth and innovation. If you’re only focusing on cost and deadlines in your interactions, you’ll find yourself in a no-growth hole.

To facilitate positivity and innovation, Mindy Holden, senior vice president of procurement and real estate at Adecco Group, with over 25 years experience in the field, encouraged a shared forward-looking mindset from the beginning.

“If they’re incented to keep innovating and keep bringing you new ideas, and you share in that together, you’re going to have even more success than you would and not managing them,” she noted. “Like the task: ‘Well, did you do that task on time?’ It’s really, “Are we achieving the outcome that we are trying to get?”

Widmann, of Welbit, emphasized how are like a marriage: “It’s a true partnership, because even if you don’t have the white glove and you don’t do it correctly, it’s going to cost the company money to go out and find that right supplier…if you have been through a divorce, it is costly, so doing a conversion to another supplier? It is going to cost the company time and resources.”

But what if a divorce might actually be the correct step forward for all? How do you know when to make that move?

“Every relationship is based upon the success of the communication process,” Richardson asserted. “If you are very clear about what those expectations are and that supplier is measured against them, then of course if they default in that responsibility, you clearly have the opportunity of terminating that relationship.”

Looking for more? Download Spend Matters’ take on this topic, “Leapfrog the Competition by Transforming Your Supplier Relationships from Tactical to Strategic,” for other strategies you can employ.

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