Keeping Ahead of the Game Through Positive Supplier Relationship Management

Here's a guest post on our "Hot Topic" for April from Jon Milton, Business Development Director of Comensura, which provides vendor-neutral managed services in the contingent labour area.

Hot TopicWhilst Comensura is a supplier itself in the eyes of many procurement executives, we have our own supply chain and therefore consider supplier relationship management in a manner similar to that of many Spend Matters readers.

Indeed, supplier relationship management (SRM) within the world of managed services for agency staff is an ‘interesting’ topic.

‘Interesting’ because part of the work of a managed service provider is to standardise the rates charged by agencies and control their interaction with the end user. For some agencies this means substantially reducing margins and placing them on a level playing field with other suppliers where the quality of their service, rather than their ability to sell, is measured and controlled. There can be some grumbling.

For others we provide an opportunity to grow their market share, without the need for an army of sales people, and the ability to be paid regularly, on time and accurately. It’s easy to see the appeal for SME’s in particular.

When managed services first came to market in the early noughties, many managed service providers (including ourselves) adopted an arms-length relationship with suppliers. For us certainly, our approach to SRM has dramatically changed over the last few years, and we now have a very strong relationship with many key suppliers.

So what does this mean for us, and why do we bother? Well, it helps us win business for a start. We actively encourage customers to call agencies and ask for their opinion of managed service providers as we know that the specialists will talk candidly and often in our favour. Testimonials with positive quotes have really helped us and whilst this does not apply in the same way for every organisation or industry, it is worth asking yourself the question - “what would our suppliers tell our customers about us if they asked”?

Talking to suppliers and respecting their understanding of their market also adds significant value to our service delivery model. This in turn has significant benefit to our customers. The UK economy’s skills requirement is rapidly diversifying and recruitment agencies are specialist in the types of workers they provide. Seasoned recruitment professionals are often a good source of information and opinion, so it pays to have earned their respect.

Where there are national shortages of workers, for example HGV drivers, planners, social workers and doctors, regular and on-going dialogue with agencies has successfully helped us to address worker attraction challenges so that we can use our best endeavours to meet customer demand.

It has also helped us to identify non-price based initiatives to help customers address fulfilment, while keeping costs low and avoiding escalating wage inflation wherever possible. It also enables us to work with our customers to plan for their temporary workforce needs better. All of this comes from being open to and learning from our key suppliers, and that is certainly something that is transferable to most organisations.

Good SRM also helps us to innovate. As a market leader, our key focus is on maintaining competitive advantage and identifying areas of continuous improvement. Agencies (our suppliers) are often forthright with their opinions on aspects of service delivery, and are quick to point out the positive and negative points of our own performance and that of our competitors. We in turn appreciate their candour.

All in all, we firmly believe that the relationship between ourselves, our suppliers and our customers should be win/win/win. It’s not rocket science – trust, respect and communication at the end of the day between people that know what they’re doing – and having the humility to recognise the value that suppliers bring.

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