Good SRM key to good business

9 November 2007
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09 November 2007 | Rebecca Ellinor

Purchasers need to both pressure and respect suppliers if they are to get the best value from them.

That was the message from Luc Volatier, executive in residence, purchasing and operations management, at the Institute for Management Development in Switzerland.

Addressing delegates at Procurecon in Brussels this week, he espoused the benefits of working alongside strategic suppliers instead of assuming an adversarial position.

"For years we've trained, selected and incentivised people to squeeze suppliers - they are beasts - suppliers don't stand a chance. The more pressure you put on the better you feel, but the more value you destroy. Organisations are reducing the number of suppliers they have, which means suppliers are becoming more powerful - they have a greater stake in your business. Of course you need to be competitive but you also need to develop relationships. You need to put pressure on but not too much, that's the challenge."

Volatier's advice to buyers was summed up in five points:

* Remember you buy from individuals, not companies * Be open and fast in your communication with suppliers - there's nothing worse than trying to hide bad news * Building trust takes time and effort * Try to maintain a "full reservoir of goodwill" because you never know when you might need to call in a favour * CPOs would do better to see themselves as 'CROs' - 'chief relationship officers'


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