As leaders of change, we know this old fashioned attitude isn’t an effective approach when dealing with suppliers. It can lead to a series of unhelpful behaviours, such as tampering, and a degree of tension can develop between customer and supplier. It is a position that can be hard to come back from. It hampers your ability to work together on improvements and in some cases can make the future relationship potentially unsustainable.
The relationship you have with your supplier base is critical to the sustained success of your business – and theirs. Getting it right is imperative. The challenge is, how to get results when the processes you are working on extend beyond your sphere of internal influence and into their supply chain?
In addition, if your suppliers are not using the same tools and methods to make their work, work then the chances are that you won’t be speaking the same language. That can mean miscommunication, misunderstanding and lost opportunities.
I’ve been having some interesting coaching conversations recently about this subject.
Some clients require their suppliers to demonstrate continuous improvement as part of a Service Level Agreement. They run a Dashboard, with a traditional traffic light approach, and are continually frustrated by the fact that their suppliers remain in the red for continuous improvement.
Should they try something different? Should they seek out new suppliers?
An additional complication can be when your supplier is significantly bigger than you, such as the UK-based retail client we work with, who has 150 retail stores but is supplied by huge, multi-national corporations whose turnover exceeds theirs by many millions of GBPs.
~ What do you do when you don’t have the buying power to demand the supplier improves?
~ How do you get started working with suppliers to successfully reduce waste and variation?
It’s important to be clear on what you are trying to accomplish. In most cases, we find there are 3 common scenarios that relate to cost, quality or delivery:
In a recent case, a client I was working with had decided to focus on achieving results with what they described as 2 primary suppliers. The questions they were struggling with were:
~ What do we need, as a team, to be able to do this successfully with the suppliers?
~ How do we get started working with the supplier?
Another way to think about this is to ask; “How do you know these are the right suppliers to be embarking on this kind of programme with?”
This same client decided to step a step back and broaden their thinking. They selected a larger set of suppliers to consider and together we looked at four criteria for each one:
The client realised that whilst gut reaction was telling them which suppliers they should be focusing their attention on, they didn’t have sufficient data to support their theories.
The good news is that the tools and methods for working with suppliers to improve are no different to working on improvements inside your system.
The Improvement Cycle still applies and Selecting Priorities is the first step.
So when you are looking at the continuous improvement of your suppliers, here is what we recommend:
The art comes in developing the skills of your people to intervene constructively because, in effect, your people are acting as consultants to their suppliers.
This role requires different behaviours from those normally expected, both for them and their managers. Development for both requires specific training and coaching and will help you realise the benefits of successfully collaborating with your suppliers to improve your system and delight your customers.
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