Supplier Behavior Matters: Forrester’s Sourcing and Vendor Management Summit (Part 1)

Later this week, I'll be giving a keynote at Forrester's Sourcing & Vendor Management Forum 2012 in Las Vegas. The key premise of my talk is that what your suppliers do (and don't do) matters. In our view, company executives must now concern themselves not just with the performance and risk of their own operations -- they must consider their supply chains as extensions of their organizations where they're accountable for supplier behavior and activity.

The task to manage this responsibility falls on procurement and vendor management organizations to get things right. But whether these tasks involve proactively managing supplier labor and environmental practices or analyzing how suppliers vet, treat and manage sub-tier vendors to reduce supply chain risk, companies must take action. Throughout the talk, I'll share our hypothesis that supplier networks, collaborative groups and even social applications will play an increasing role in how we manage global suppliers.

To bring the topic alive, I'll provide a number of use cases about how supplier management is changing procurement and even business strategy. These include:

  • A high-tech manufacturer that was able to bring a product to market within the EU on schedule despite new environmental regulation mandating the elimination of harmful materials in their products
  • A financial services company that was able to ensure that all vendors that showed up at its premises had requisite and current insurance
  • A group of regional hospitals and IDNs that were able to validate that vendor personnel had requisite vaccinations and health checks before stepping foot in clinical facilities
  • How an industrial manufacturer is gearing up to enforce conflict minerals traceability requirements/legislation in their supply chain

I'll also argue that technology is critical for supplier management because it allows organizations to do more with less and focus limited resources on areas that count. Supplier management solutions also allow companies to create audit trails while moving from being reactive to predictive in supplier management initiatives. They also enable the analysis of more of your supply base, not just a small subset (and the ability to tier suppliers as needed).

In addition, supplier management tools enable supply managers to plan for and manage performance problems and disruptions in the supply chain. On a proactive basis, they also automate the collection of supplier risk and performance information to help prevent or avoid problems and also enable a timely response as unavoidable incidents occur. Last, they allow companies to gain access to more information than most firms typically have available within their own four walls.

Thanks to Forrester for the opportunity to present to a great crowd of vendor managers, among other sourcing professionals. If you're going to be at Forrester's Sourcing & Vendor Management Forum 2012, drop a line. I look forward to saying hello in person.

- Jason Busch

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