IT eases supplier relations

14 December 2006
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14 December 2006 | Antony Barton

The growing use of IT has maintained or even improved personal interaction between buyers and suppliers, according to 60 per cent of respondents to SM's latest poll.

They disagree with findings by consultancy Leadent, which claimed organisations were often preoccupied with the instant savings technology offered.

As a result, the research suggested, some failed to consolidate existing suppliers and secure best cost.

Respondents said IT improved their relationships with suppliers by removing the need for mundane interaction and creating time for quality meetings.

Sue Fleming, project buyer for Foreign and Commonwealth Office Services, said IT allowed the procurement department more time to negotiate with suppliers on more professional aspects, such as end-to-end strategic supply chain involvement.

A procurement officer for a local authority, who did not wish to be named, said: "IT solutions are improving relations between us and our suppliers - particularly with our e-tendering system, because we are showing we care about them by reducing administration, a burden they suffer when preparing complex tender documentation."

Although four out of 10 respondents thought IT reduced the level of personal interaction, most of those said this decrease in contact was beneficial.

Adam Smith, a senior buyer for Ceramaspeed, said: "It may be that the personal touch between buyers and suppliers has been lost but were three-hour lunches and nights at the races ever necessary to discuss a contract?"

Some respondents, however, agreed with Leadent's findings. Natalie Frost, senior sourcing manager for Fujitsu Services, said that a reliance on IT meant purchasers lost the opportunity to negotiate on a spot basis. In addition, the lack of supplier consolidation could affect the ability to negotiate other terms and conditions, such as stock protection rights, rebates and payment terms.

"You need to ensure that your system does not buy based on price alone," she said. "It is no good getting a great price and receiving poor performance."

SMdec2006

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